Tue | Jul 14, 2020

Survey: Foreigners seeking property prefer to pay cash

Published:Tuesday | November 6, 2018 | 12:00 AM
Howard Johnson Jr, president of the Realtors Association of Jamaica.

More than half the foreign interest in regional real estate, whether to buy or lease, emanates from the United States, a new study has found.

The report also ranks Jamaica as the third most sought after market in Latin America and the Caribbean.

Foreigners are willing to spend US$200,000 to US$250,000 on residential real estate on average, and US$450,000 to US$500,000 for commercial property, with just over half of the respondents - 55 per cent - saying they intended to pay cash for the residential purchases, according to the 2018 report on Outbound Referral Business of Latin America and Caribbean International.

The report is based on an online survey of "outbound referrals", relating to clients of realtors seeking to buy or lease property abroad or seeking to sell or rent out their properties to clients abroad.

The survey was conducted in May in English and Spanish by the National Association of Realtors and its results released locally in October.

The report indicated that 58 per cent regional realtors deal with such referrals, and that 56 per of outbound referrals went to American business contacts. The survey also found that nearly half of referred commercial buyers led to property acquisitions.

President of the Realtors Association of Jamaica, Howard Johnson Jr, said it was the first time that NAR had surveyed outbound referral business.

"I am pleased that Jamaica was ranked among the top three in all categories with the United States of America and Mexico. Many international practitioners sought a member of the RAJ for residential investment and more important commercial real estate - a category we led in," he said.

But as for what the referral business translates to in dollar terms, Johnson said no data exists for the region, but that the Jamaican arm of NAR was working on compiling local data through member dealers and the Statistical Institute of Jamaica.

In the NAR survey, the breakdown of outbound referrals for the region were: selling a residential property, 34 per cent; renting out a residential property, 26 per cent; purchasing a residential property abroad, 18 per cent; leasing a residential property abroad, 6 per cent; selling a commercial property, 9 per cent; and purchasing a commercial property abroad, four per cent.

A third of the realtors reported an increase in outbound referral business in the past five years.

The survey also found that for persons seeking to lease residential properties abroad, just over half of them were interested in condominium units and that 82 per cent intended to use the residential property for vacation, rental investment, or both; while commercial buyers were interested in a mix of properties: office, vacant land, industrial, retail, as well as hotels and other structures related to business.