PROFESSIONALS IN the mortgage and real estate industries are advising persons who were planning to invest in real estate this year to go ahead with their plans despite the uncertainties being created by the COVID-19 pandemic.
“From what we’ve observed in the market, it is still a good time to invest in real estate, especially residential properties,” said Petal James, chief of branches at JN Bank. “People will always be seeking a place to live, and that will not change. Plus, real estate continues to be one of the best investments anyone can make.”
She was addressing the JN Bank Redesigning Your 2020 Goals online series. The social media series, which will run from May 21 to July 23, are practical conversations about how Jamaicans can maintain or adjust their financial plans based on the impact of the COVID-19 pandemic.
However, James cautioned persons who are seeking to purchase for investment purposes, especially for short-term rentals. She noted that the tourism sector has been on lockdown, borders are closed, and entertainment on the low, hence buying for investment may not be a good idea during this period.
“You need to ensure that when you make an investment, there will be a return on your money,” she stated.
Andrew James, president of the Realtors Association of Jamaica (RAJ), further recommended that persons who already have investments in the short-term rental or Airbnb sector should consider transitioning to the long-term rental market until the crisis is over. He added that despite the downturn in the short-term rental market, property prices have remained stable.
“Property prices are being maintained at levels which existed prior to the COVID-19 pandemic,” James explained. “However, what we have seen during the past few weeks is a reduction in some of the rentals. Many of the properties which were targeted to the Airbnb market are now coming into the pool of long-term rentals. Therefore, we are seeing a reduction in rent prices in this regard. However, I have not seen any reduction in terms of the sale prices for homes,” he informed.
The RAJ president also said that Jamaica was an interesting case in this regard as many countries are already seeing reductions in real estate prices but that has certainly not been the case in this country.
“However, what is being affected by the pandemic are actual property showings or viewings. We have encouraged our realtors to conduct virtual showings. Therefore, clients are sent videos of properties to view online, from which they can determine their level of interest, prior to arranging a physical property visit,” he explained.
He also advised, “Naturally, when we do the physical visit, we encourage our clients and realtors to wear masks and gloves as well as to avoid touching anything,”
As it pertains to location and price points, James stated that the possibilities were wide ranging.
“If you want to spend in the region of $14 million and below, then St Catherine may be your best bet. Therefore, areas such as Old Harbour and Portmore may be good options,” he suggested. “However, if you can spend above $14 million, then you may want to explore Zaidie Gardens, off the Washington Boulevard in St Andrew, where you may be able to find a property for $20 million.”
James said that persons who want to spend approximately $30 to $35 million, could consider areas such as Meadowbrook or Havendale in St Andrew. “However, if they are thinking about the Hope Pastures area, then that’s about $45 to $50 million.
In terms of whether there would be an uptick in the market soon, James pointed out that it would depend on several factors.
“It depends on when we will be fully reopened for business as we’re in a ‘wait and see’ situation. However, by the end of the month, we should have a better idea about the Government’s plans … ,” he said.