Realtors give advice on timing real estate buys
From left local realtors Andrew James, Howard Johnson, and Andrew Issa.
The current economic crisis triggered by the coronavirus pandemic may present opportunities for new home buyers, according to CEO of Better Homes and Gardens Jamaica, Edwin Wint.
“Every crisis creates opportunities and there are good opportunities in the market for people to buy real estate now, despite the pandemic,” he said.
Wint noted, however, that the purchasers should carefully plan their finances to ensure they have a bit of a cushion to weather a storm, in case their job security may be at risk.
“Real estate is one sure investment in times of uncertainty, but prudent planning is important,” he stated.
Andrew Issa, CEO of Coldwell Banker, indicated that buyers in all segments are still active.
He noted that while 2019 was the company’s best year, Coldwell Banker is doing even better in 2020, with sales up 16 per cent, year-over-year.
He has expressed the view that the industry is benefitting from pent-up demand and momentum created in 2019, which is likely to carry realtors through the rest of the year.
He and others, however, said the decision to buy a new home or continue renting will come down to individual resources.
“I always tell people to reserve between six months to a year in cash,” Issa said, noting that under COVID-19 conditions people will be protecting their cash, as opposed to spending.
However, he said, some investing companies were doing better than others and housing developments continued to be rolled out, despite the pandemic.
Andrew Issa, CEO of Coldwell Banker.
For his part, Andrew James, managing director of AS James and Associates Limited, Real Estate Dealer and Appraisers, commented: “It is always better to be paying a mortgage than rent.”
James, who also serves as president of the Realtors Association of Jamaica (RAJ), noted that mortgage payment will end at some point, unlike rent one will never stop paying.
Additionally, should you lose your job, you could speak with the mortgage institution regarding a moratorium or payment holiday. A landlord with a mortgage is less likely to be understanding, James advised.
Now, with the reduction for deposit and government transactional cost (transfer tax and stamp duty) it is the best time to buy real estate, James said.
“Now is the best time to take advantage of the low-interest rate being offered by the various financial institutions,” he added.
Andrew James, managing director of AS James and Associates Limited.
Howard Johnson, CEO and broker with Howard Johnson Realty, told Loop News that the choice between buying and renting comes down to an individual's readiness.
“Paying rent may not be the wisest investment if one has the resources to purchase. Owning your own real estate is always a wise choice. In the climate that we are in, there may be many options to purchase depending on the price point that one may be interested in,” he said.
Johnson observed, “Construction islandwide is still very much active. So inventory is available if buyers are ready.”
Still, he noted that if there is job uncertainty, “then awaiting stability would be a more suitable option than the embarking on what may be considered the largest investment one will make”.
For those who have recently purchased a home, only to lose their jobs, Johnson commented: “It would all depend on options available.”
Howard Johnson, CEO and broker with Howard Johnson Realty.
For instance, “there are options to stay with family and friends, then renting the recent purchase is a viable option. If there is nowhere to go, then a conversation with the mortgage institution is recommended, Johnson noted”, he said.
Issa noted that developments in the next five months will determine any major change that will occur in Jamaica in the first quarter of 2021.
Noting that hotel occupancy is still below 40 per cent for many properties, he expressed the belief that if this could reach 60 per cent during the winter season, this would have a ripple effect on the wider economy.
He said, however, that if the economy continues to shrink towards the end of the year, then we might start seeing people begin to try to get rid of their properties for cash.
So far, he said, demand continues to be robust with Jamaicans abroad being the main buyers of townhomes on the north coast. Demand remained strong in all segments, he noted, with one property in Ocean Towers in downtown Kingston receiving 30 offers.
He noted that Jamaicans abroad may be fuelling new demand, as some might decide to bring their retirement forward instead of waiting.
The only constraint on this year’s trend, he said, was the Jamaican dollar, which keeps losing value.
For rental properties, he outlined, this meant that owners were being asked to switch to Jamaican-dollar amounts by their tenants and new properties now have to be listed in Jamaican dollars.
Discounting is also occurring in the rental market, he said, with properties which rent at $150,000 now being offered at $120,000 and $130,000. Discounting on the sale price, he said, was not likely to be seen until 2021, and only if COVID-19 prevails until the end of the year.
Otherwise, he projected, “If there is a good winter season, it [the real estate market] will continue to do extremely well.”
Coldwell Banker is about to place on the market Glenmuir Country Club in May Pen, Clarendon.
The gated community features 55 units, including townhomes and three-bedroom bungalows, a fitness centre, swimming pool and 24-hour security. The price point ranges between $24 million and $31 million per unit.
Issa said he expects offers to come from sectors including Jamaican professionals overseas and retirees from abroad.