Jamaica: Price History

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Demand for beachfront property on the rise on Jamaica

On the coast, in the heart of the beachfront boom, amid the bikinis and the starlets, land prices have doubled in ten years to around US$400-600,000 an acre (4,046.86 sq. m.), from around US$200-300,000 an acre ten years ago.

Jamaica has now virtually run out of virgin beach space. The main driver of these coastal price rises has been a large expansion of the hotel sector.

The pioneer was the mid-range Spanish Riu group, which opened the 416-room Riu Tropical Bay, then the 420-room Club Hotel Riu Negril, both on Bloody Bay beach, and finally the 856-room Riu Ocho Rios. Also highly active are two local high-end hotel groups, the Sandals resorts and the Superclubs Breezes resorts.

Other entrants include the 427-room Ritz-Carlton in Montego Bay, and the Colombian Decameron group, which has hotels in Montego Bay and Runaway Bay. At Harmony Cove near Falmouth a vast new resort is planned with golf courses, multi-million dollar villas, four hotels and casinos.

“Even in the last 3 years, the whole picture has changed,” says Gordon Langford of Langford & Brown.

Still undervalued

The substantial increase in residential prices has not dampened foreign interest. That’s because, arguably, Jamaica is still undervalued compared to its Caribbean neighbors.

Buyers can still find great properties on the island at a relatively affordable cost, though there are already patches with prices at Barbados-like levels, for instance the gated communities of Round Hill at Montego Bay, and Tryall Club.

“But these are just two little pockets, whereas generally a resort villa here is a fraction of what you would pay in Barbados,” says Langford.

The “local” property market – i.e., where most islanders themselves actually live - has risen less in price than coastal areas, doubling in terms of Jamaican dollars in the past 10 years, but only rising one third in terms of US$.

But falling interest rates (Now 10%-11%, down from 14-15% four years ago), and the Jamaican dollar’s decline to US$1=J$66 today, from US$1=J$42.50 in January 2001, seem set to push prices up further.

Strained prices

“Prices at the top end are a little strained,” warns Langford, defining properties over US$350,000 as ‘top end’. “The prices of such properties depend on their rental income, they would need to rent for something like US$4,000-US$5,000/month, but the US embassy has just corralled its staff into one building, so there are about 50-60 properties suddenly empty.”

The average price for properties in Jamaica’s western coastal areas is around US$2,000 per square meter (sq. m.) in 2005. The average price for properties in Kingston, the country’s capital, is around US$1,600 per sq. m.

Tourist growth seems actually set to pick up speed. The government is building a new highway, and expanding Montego Bay airport. More charter flights will follow Virgin Airways, which recently inaugurated two weekly flights.

Despite growing environmental concerns (exemplified by the outcry over the 2,000 room Bahia Principe resort at Runaway Bay, which disturbed turtle hatching patterns and damaged the corals) and Jamaica’s worryingly high crime rate, more and more hotels and high-end housing developments seem sure to be built.

Jamaica - more data and information

• Jamaican house prices, rents, and letting income - real data!
• How expensive are houses in Jamaica, compared to the rest of Caribbean?
• How much rent can be earned from Jamaican property, compared to the rest of Caribbean?

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posted by A. Foster | 2007-06-03

Lecturer and Beautician, UK

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