The owners of property still call the shots, but real estate brokers say that as economic conditions worsen, conditions in the market could switch.
"We are still in a sellers' market although properties are not moving as quickly as before," said Deborah Cumming, managing director and broker at Century 21 Heave-Ho Properties.
"This is an indication that the market is changing," Cumming told Sunday Business.
The Realtors Association of Jamaica holds the same view, with president Edwin Wint predicting a rebalancing this year in some residential markets.
"We are still experiencing a seller's market but this could trend towards a balanced market for some segments in 2009," said Wint.
"Supply of top-end residential gated rental properties has increased and the demand has remained flat so we anticipate price/rent for this market segment flattening for 2009 but demand for properties for purchase or rent priced in the mid-range are expected to grow," explained Wint.
Not as clear-cut is commercial segment where space in preferred locations are hard to come by.
"Commercial properties have experienced very limited increase in supply and there are still opportunities in this market segment for 'value for money' deals in the office and retail segment," Wint said.
But while the outlook for the year ahead is still optimistic, players in the sector remain cautious about the market's vibrancy, given the erosion of disposable income.
"The extent to which the property market can maintain its buoyancy for 2009 is depen-dent on how well the national economy is able to weather the storm of the global economic and financial fall-out," said Wint.
Jamaica has been hit hard by the crisis, losing some $200 billion of stock market wealth, even as credit is constricted, loan defaults climb and the local currency sheds value to close at $80.47 at year end.
The Jamaican government has promised a stimulus package valued at least $28 billion to shore up the productive sector and the credit markets, but in the meantime, hotels, bauxite/alumina companies, and other businesses have been shedding jobs.
The Government will give up immediately some $862 million in tax revenue to free cash for other spending.
The real estate industry was among the beneficiaries with a reduction in transfer tax, from six to five per cent following a similar reduction in April at the reading of the budget when it was lowered to six per cent from 7.5 per cent.
budget presentation
In his budget presentation the minister of finance had also announced that stamp duty on property transactions would be dropped from 5.5 per cent to 4.5 per cent - all welcomed measures that real estate brokers said would bolster sales in the market.
A year ago, real estate was valued as a $50 billion market valued by transactions.
The 2008 numbers are not yet available to estimate growth or decline, but, according to industry experts the market maintained its vibrancy for the first half of the year.
As the year progressed, however, so did the challenges.
"The Commercial market during the first half of 2008 saw several properties changing hands," said Cumming. "However towards the end of the year these declined."
There was a tremendous amount of new construction, mainly residential, as well as pre-construction sales of townhouses and apartments which were also at an all-time high, say the experts.
During the year, offerings on the market included a 28 unit luxury apartment complex, the Lexington in Norbrook - a $1 billion investment by developer David Stewart.
Luxury one and two bedroom townhouses on Stilwell Road fetched price in the range of $18.5 million to $20.5 million.
An upscale two bedroom apart-ment complex, Selena Arms located in New Castle also came on the market, with units priced at $18.6 million to $20.6 million.
Areas outside of the Kingston Metropolitan region also had a fair share of developments, such as, the Emerald Estate, offering 33 two and three bedroom townhouses priced between $10.5 million and $11 million; Sagicor's residential development, Llandovery in St Ann, the Porto Bello in Montego Bay targeted at the high-income market, as well as a $4 billion project by Richmond Development Company to transform a 500-acre property in St Ann into houses for retirees.
"The sale of high-priced gated new-build residential properties has slowed but the price range between $10 million and $20 million still has a relatively strong demand," said Wint.
"In the resort segment, like in Montego Bay, we are experiencing high returns and are still hopeful for locations like Port Antonio to continue to be highly sought after into 2009," he added.
Among the factors impacting the market during the year were increased interest rates, which led to a spike in mortgages; inadequate supply of residential properties in the mid-range price of $10 million to $20 million to satisfy demand; and limited new supply/development of commercial real estate to meet the demand of property investors such as pension funds.
While no back-up data has been presented, it was also said that the fall -out of the alternative investment schemes have had an effect on liquidity in the market.
growth
"Some purchasers were unable to complete their pre-construction purchases and others defaulted on their mortgages as their cash dried up," said Cumming.
Notwithstanding some downturn in the market going forward, the expectation is for property values to continue to appreciate into 2009 but not at the same steep curve as in 2007/2008.
"Prime properties could appreciate at an average rate of say 20 per cent and 30 per cent per annum, and others averaging between 5-15 per cent for 2009," said Wint.
"Rental values are, however, expected to be relatively flat or not exceeding 10 per cent for 2009," he added.
Cumming predicts that market growth this year will be most evident in the residential market, particularly those properties listed at $5 million to $18 million for townhouses and $35 million to $40 million for single-family homes and high-end townhouses.
Purchasers for commercial properties will continue hunting for good deals, she said, but investments will be constrained by reduced supply in high-end residential and commercial properties.
sabrina.gordon@gleanerjm.com