Real estate deals plunged last year
REAL Estate transactions in Jamaica totalled some $100 billion last year.
That represented an over one-quarter decline on the $140 billion spent in 2012, according to the Real Estate Data Report 2014 published by Kingston Properties.
Essentially, the sector continues to make a slow recovery from the Western financial crisis.
The report released this month analysed over 55,950 transactions comprising of residential, land and commercial transfers tabulated from the National Land Agency's data bank.
Commercial transactions, particularly in the tourism sector, apparently contributed to western parishes leading the nation in transactions in 2013.
"In 2013, Westmoreland was responsible for 27 per cent of the value of real estate transaction for the year; next was St Andrew, St Catherine and St James with 22 per cent, 16 per cent and 14 per cent, respectively," stated the report. "Lowest total transaction value was in Kingston and St Thomas with $771 million and $609 million, respectively."
The dataset spans a seven-year period ranging from January 2008 to December 2013.
It indicated that real estate transactions totalled roughly $200 billion in 2008, $100 billion in 2009, $50 billion in 2010, $150 billion in 2011, $140 billion in 2012 and $100 billion in 2013.
On average, the Jamaican economy experienced approximately $121 billion per year in real estate transactions.
"Research has shown that the value of real estate transactions plays a significant role in the growth of a country's economy. As shown below, over the period studied, real estate transactions accounted for approximately 20 per cent of GDP in 2008," stated the report. "Understandably, in 2009 and 2010 we experienced a dramatic reduction in the value of real estate transactions in Jamaica, due to world economic conditions which may have lowered consumer confidence leading to a reduction in real estate transactions of $1.7 billion in 2009 then by $536 million which accounted for 8.9 per cent and four per cent of GDP."
Between 2011 and 2012, Jamaica's real estate industry has been recovering; real estate transactions have since been responsible for 12 per cent and 11 per cent of GDP, according to the report.
Kingston Properties later told the Observer that 2008 benefited from one-off sugar transactions which spiked its contribution to GDP.
"Therefore, this would not necessarily be repeatable," stated Kingston Properties in mailed correspondence to the Observer.
The real estate portfolio of Kingston Properties, which is listed on the Jamaica Stock Exchange, includes some 18 condo apartments in Loft II in downtown Miami; roughly 26,000 square feet office space on Hagley Park Road in Kingston, Jamaica; and some 48,000 square feet of office/warehouse complex on Red Hills Road.
Kingston Properties earlier this year announced that its after-tax annual profit dipped 70 per cent year on year to $52 million despite benefiting from rising rentals and the revaluation of its Miami, Florida condominiums.
The company earned $84.3 million profit from its Miami properties, $5 million from investments in St Lucia, but recorded a $37 million loss on its Jamaican properties, audited financials indicated.