BUILDING HOPES ON REAL ESTATE
Experts see tremendous opportunities for growth and job creation in industry
SEVERAL STAKEHOLDERS in the real estate sector say planning is critical if the Government is to capitalise on the tremendous opportunities the sector provides for helping to create sustainable economic growth.
“... Real estate can be a pillar of economic growth if we apply planning and an overall objective, or strategy. One of the things that will impede economic growth is the lack of zoning or the lack of planning,” Howard Mitchell, former chairman of the National Housing Trust, told The Gleaner.
“In terms of commercial real estate and the economic growth, that [planning] is required and the kinds of facilities that are required for manufacturing and commercial logistics distribution [as well]. We started off with Highway 2000 and we zoned lands for development, but I have not heard anything further of that. I have not seen any publication of the zoning or anything to encourage development going on there.
“You can’t just have real estate as a tool for development, it must be planned real estate, and that is what they are missing in this country.”
Regarding non-commercial real estate such as housing, Mitchell said the construction of some housing developments in areas like Old Harbour, St Catherine, were not part of an integrated development plan.” You build the houses out in Old Harbour and they’re built or left out there by themselves, and the people who live out there are like the French Foreign Legion.”
Edwin Wint, president of the Realtors Association of Jamaica, said he could not immediately put a figure on the dollar value of real estate, but he noted that one project he is working on values close to US$300 million (J$36 billion).
He wants the Government to pursue strategies to entice more foreign direct investments into local real estate development.
“That could really push our growth numbers if we had large real estate development and we had global players coming in and doing large development. Then we would not rely only on Jamaicans and those in the diaspora to buy,” he told The Gleaner.
In August, the Government’s point man on investment, Daryl Vaz, said the administration had been looking at pulling in major investments and would be focusing greatly on reducing the complicated bureaucratic areas.
Regarding increases in cost of housing over the years, Valerie Levy, the founder of the 30year-old Valerie Levy and Associates, said real estate remained “an incredible” investment and tool for growth and job creation.
“I know a house that sold for J $1.5m in 1984 on, say, five acres that was sold recently for US$1m (J $128m). So as long as the location is well kept and close to services, it is incredible the way prices have moved up. It’s good or even better than keeping US dollars, because of the devaluation.”
One proposal being resubmitted to the Government regarding downtown Kingston real estate is the issuance of land bonds that Victor Cummings, trade administrator, feels could drive economic development.
“What I have suggested, and I still stand by, is to issue these land bonds based on the value of the land. You put the bonds aside, if the owner turns up they can redeem it. But more than likely, the persons who own the property will never turn up; so what you can then do is to leverage the properties for redevelopment.”
Real estate falls under the construction sector and accounts for about 10 per cent of gross domestic product and employs approximately 80,000 Jamaicans, according to the Economic
and Social Survey 2015 report. It’s one of the areas that the Government expects huge growth numbers from this fiscal year.