Valerie Levy, ContributorIN THE last quarter of 2004, demand for housing was strong and supply was scarce; thus we began to see a rise in housing prices across the board. As we move into 2005, demand for property remains strong thereby creating a 'Sellers Market'.
THE RESIDENTIAL MARKET
Resales are attracting multiple offers and new developments are being booked out before construction begins. Due to the strong demand and the lack of existing inventory, prices are increasing and my prediction is that this trend will be sustained well into 2005.
Purchasers recognise this and are committed to buy as soon as they are introduced to a property that meets their needs.
Listed below are some examples showing the appreciation in recent years:
New developments in these areas are now on the market and are priced from $16 to $27
million depending on the
location of the development, size and design of the unit, and amenities offered.
However, properties for sale within a range of $6 million to $8 million are in most demand and are attracting multiple offers. And the main reason that developers are not building $6-$8 million homes is that in Kingston and St. Andrew, we are running out of land that is easily developed; that is, flat land with infrastructure already in place or close by.
Due to the shortage of land, prices have escalated and so because developers are paying more for land, the prices of units are escalating. We also have to take into account the density requirements in any given area. The higher the density allowed the more feasible the project is to a developer. As a matter of fact, Stony Hill and Red Hills are looking very attractive now, as there is more available land in those areas.
THE RENTAL MARKET
The rental market remains buoyant and residential property rentals ranging from US$1,600 to US$2,200 in the townhouse and apartment segment are the most sought after. Investors should keep this in mind!
The U.S. Embassy move will impact somewhat but not enough to cause a retreat in that segment as they represent a small segment of the rental market. There are many other embassies, corporations, communication companies and the demand for rental increased significantly with the Highway 2000 project.
The greater demand for the local market is another kettle of fish as the rental most in demand in that arena ranges from $40,000 to $90,000. Properties in this range are really hard to find.
