House sales still rising in upscale St Andrew
Managing Director of A.S. James and Associates Limited and President of the Realtors Association of Jamaica, Andrew James said that sales of houses have almost doubled in the higher-priced upscale St Andrew community designated as Kingston 6.
At the same time, Edwin Wint, chairman and CEO of Better Homes and Gardens Jamaica Limited and a past president of the Realtors Association, says what is evident in that zone is a balanced market, which means that there is enough demand from buyers to equal the supply from sellers.
With prices ranging between $25 million and $40 million for new apartments in that area of St Andrew, James said that over $1.5 billion was raised from property sold in the first six months of 2018 compared to more than $2.5 billion during the corresponding period in 2019.
He said that the data, supplied by the National Land Agency, is only for registered sales and that others would have been sold but not recorded during those periods.
Wint noted that in 2019, apartment prices in the location ranged between $2,600 and $3,200 per square metre.
“There are very few town houses in the supply chain and little or no commercial properties,” he said.
Wint said that commentary about oversupply of newly-built apartments in St Andrew was not quite accurate, noting that while there was now some market correction taking place, a buyer’s market was still some way off.
He said that comments about an oversupply “suggests that we are experiencing a buyer’s market. This situation is where an increase in the supply of houses outpaces the corresponding increase in demand for houses. This is characterised by housing units sitting on the market for longer periods before receiving viable offers and fetch less money in the market. There’s usually fierce competition in the marketplace between sellers, who resort to price wars to entice buyers to make offers to purchase their housing inventory over their competitors.”
Wint admitted that rentals are starting to flatten and is evidence of market correction but said that the result was a more balanced market.
“There is apparently some correction taking place in the marketplace. The market segment for apartments is showing trends that rents are starting to flatten out or trend downwards in some instances,” he said.
“Investors and consumers are faced with gradually reduced returns on their investment, but selling prices per square metre on apartments are not yet trending downward,” Wint added,
He said that it is likely that if it was not for the short-term rental market, likeAirbnb, the correction could be more pronounced.
He said that the trend in Kingston 6 is not reflective of demand islandwide, noting that the upscale St Andrew neighbourhood “accounts for only a fraction of the entire Jamaican property market and our real estate market is strong, robust and resilient as demonstrated over a decade ago during the meltdown in the US property market.”