Luxury rental market have fair take-up - RAJWednesday, November 24, 2021
BY AVIA USTANNY-COLLINDER
Donovan Reid, president of the Realtors Association of Jamaica (RAJ), has indicated that rentals in both the highest category and mid-tier homes continue to perform well, with between 60 to 70 per cent take-up in the current market.
Jamaica Observer's research, meanwhile, has found that competition remains fierce for properties priced under $50,000, with owners finding ever more enterprising ways to avoid the pressure of too many people asking to be considered for rental.
Currently, the top tier of rentals are priced between $1 million and $2.4 million monthly. Homes priced in this category are performing adequately, he told the Business Observer.
The target market includes expatriates, diplomats, returning residents, retirees and people in top-tier salary ranges, he outlined.
Properties viewed in the category on the Multiple Listing System (MLS), which was created by the Realtors Association and which can be accessed at http://donovanreid.realtyhd.com, have swimming pools and other amenities.
The RAJ indicates that total inventory of residential rentals on the database are 505 units available. Reid says this represents a total value of $128.95 million in monthly income.
The RAJ recognises 10 tiers of residences by pricing. Less than 50 units are currently available at less than $100,000 monthly.
For residences priced between $100,000 and $199,000 monthly, there are 178 units currently available.
On the third tier are homes priced at $200,000 to $300,000 monthly, for which there are 139 units currently available. Rental pricing between $300,000 to $399,000 is linked to 79 units.
There are 24 units priced between $400,000 and $499,000; 11 units priced between $500,000 and $599,000 monthly; eight units priced between $600,000 and $699,000 monthly; and six units priced between $700,000 and $799,000 monthly.
As rentals rise the number of luxury accommodations fall. There are only two units priced between $800,000 to $899,000 monthly and seven units which range in price from $900,000 to $2.4 million monthly.
Reid said that the realtors association estimates a take-up to be on average between 60-70 per cent for both mid-tier and the higher-priced units.
In order to move rentals in categories where demand is less than supply, owners he outlines, list the properties on the MLS to allow for maximum exposure.
He also said that many were open to negotiating the listed rental price, and “holding the rental prices without the usual yearly increases during this period of the pandemic”.
The RAJ head also said some property owners were “switching from short-term rentals to long-term rentals”.
The Business Observer meanwhile saw only two listings for properties priced $50,000 and below in Kingston and St Andrew.
One was a studio priced at $35,000 monthly. The other was a half-side (two rooms, bathroom and kitchen) priced at $50,000 monthly.
The Planning Institute of Jamaica (PIOJ) in an update last week provided to the Business Observer said that its most recent survey, in 2018, showed that among households that pay rent, on average, 15.1 per cent of their total household consumption expenditure went towards rent, and that the nominal mean monthly payment for rent was $16,695.00.
Houses priced under $50,000 monthly are in high demand and are usually advertised in local newspapers, with hundreds flocking property owners at the given viewing time. Landlords, from research done by the Business Observer, have resorted to extensive due diligence to ensure clients' ability to pay, even doing credit checks.
Property owners in this end of the market who cannot bear the pressure of demand and contending with unknown clients have turned to word-of-mouth advertising and recommendations, holding those who provide referrals liable for any disappointment which might arise.
Also in this under-$50,000 segment, a network of rental agencies are profiting from the promise to find properties, collecting fees from many when only a few properties, if any, exist on their books for rental.