Jamaica developers stuck with hundreds of houses

…as economic slowdown affects buyers

(Jamaica Gleaner) The downturn in the economy has hit real-estate developers, with some forced to stall projects while others are hurting in the pocket as houses on the market are being sold at a painfully slow pace.

Reynold Scott, president of the Jamaica Developers’ Association, told The Sunday Gleaner that the global economic downturn, which has caused the cost of raw materials to escalate and has led to a spike in domestic interest rates, has been having a devastating impact on the real-estate business.

“They have to; there is no question about that,” said Scott when asked if developers were scaling back on projects. “They may have to find new systems of building to satisfy the demand that now exists because the truth is, the high end is contracting. So, even developers who build in the high end may find that the effective demand would be significantly lower.”

Scott, principal of Geon Group, which builds high-end homes, said even his company has had to put projects on hold.

“We have put on hold a project out of town and we are actually consolidating the organisation to deal with smaller projects that will fall within the current price demand. So we have re-engineered ourselves to take advantage of the contracting of the pie,” he told The Sunday Gleaner.

Developers who have had houses on the market are also complaining of a slowdown in the market. One such developer is Kemtek Development and Construction Limited, which is selling two-bedroom units in Trelawny known as Stonebrook Estates. The units are being sold for J$6.5 million and have been on the market for almost one year.

“The market has changed,” said Handell Tulloch, director of technical services at Kemtek. He said under usual circumstances, the units would have been sold off within six months. “We are still having houses being sold, but it is just that the rate is very slow.”

The company has only been able to sell 78 of the 150 units that were put on the market one year ago.

“The customers are holding on to every dollar that they can. They are not making these investments like they would one time,” Tulloch said.

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