Matalon Homes Limited has shaved US$65,000 (J$5.8 million) off its originally announced prices for the new Coco Palm townhouses, saying it is sharing savings from foreign exchange gains with buyers.

But, the offer of a special price advertised by the developer comes alongside a softening of the top-end real estate market that property brokers say is caused, in part, by the depressed economy.

The rental and sales boards, that have proliferated the capital's upscale neighbourhoods since summer, are signs of the price correction affecting the high-end real estate market as household incomes flatline and the local currency loses value, and new inventory is not immune, property brokers say.

Coco Palm's 28 single-family townhouses, ranging in size from 2,555 square feet to 3,467 square feet, should have come on the market at US$495,000 to US$620,000, but are now selling for a 'special' US$430,000 for the standard units and US$555,000 for four larger townhouses with basements.

The new prices reflect a res-pective 13 per cent and 10.5 per cent adjustment.

"When we made our plans, the exchange rate, at the time, was J$72 to US$1. But then the dollar depreciated - going from $72 to $82 in six weeks. The first price stated was in relation to this depreciation," said Ryan Bramwell, financial controller for Matalon Homes.

At the $72 conversion rate, the townhouses would have cost the equivalent of J$35.6 million and J$44.6 million, but at the current exchange rate, and even with the discount, they are selling at J$38.5 million and J$49.7 million.

The units are to be delivered by April 2010.

Bramwell said most of theconstruction was completed at the higher exchange rate, giving the company a bigger bang per US dollar of expenditure, and that this was reflected in the reduced price for the townhouses.

"All the structures are complete. The roofs are on, tiling is complete, doors and windows are going in and other materials have been procured. A lot of what is left is just labour costs, which is not moving in relation to the price of the USD. Essentially, what we have done is pass on the benefit," said the financial controller.

Switching neighbourhoods

Edwin Wint, president of the Realtors Association of Jamaica (RAJ), says demand from home-buyers and renters has swung from the Kingston 8 area, where Waterworks is located, to Kingston 6 locales - encompassing places like Millsborough, Mona and Hope Pastures.

The reasons: school and traffic.

"The American school has moved from Kingston 8 to Liguanea. Buyers prefer to live where their children go to school," he said.

"The second reason is that the level of congestion and commute-time to places of work for Kingston 8 is becoming unattractive. It is easier to commute from Kingston 6."

The school he referred to is the American International School of Kingston (AISK), formed to accommodate the children of diplomats, embassy and mission staff, but, which is also attended by children of rich Jamaicans. AISK formerly operated at Olivier Road, at the edge of Norbrook, but relocated this summer to Hope Pastures where it has built a more permanent school.

Wint, who earlier this year had advised that properties priced above J$35 million were not selling, now says there is a price correction downwards at the upper end of the market, reflecting reduced expectation.

"New buildings which are being sold from plans are rapidly on the decline. Purchasers are much more discerning at the top end," said the RAJ president, who is also chairman and chief executive office of La Maison Property Services.

"While, in general, we have a balanced market - neither buyer nor seller in control - at the upper end, it's more of a buyers' market."

Lorraine Levy of real estate brokers Valerie Levy and Associates Limited, said that reduction in prices across the board has resulted in some activity in a previously dormant market.

"It is a buyers' market, and the buyers are being very cautious as they should be. They want quality, and in some of the places, the finishes are not so nice," said Levy.

"There are qualified buyers out there. The interest rate is high and some are not qualifying, but those who do qualify are hoping that prices will come down even further. Prices have to come down a bit more to see increased activity."

Matalon Homes, whose princi-pals are cousins Peter and Joseph Matalon, invested in the region of $900 million to develop the three-acre property.

Bramwell said no design elements have been compromised in the price change.

Prospective buyers will be required to make five instalments on the property.

avia.collinder@gleanerjm.com