the Jamaica real estate sub-market
The general market for goods and services is composed of many sub-markets. When they are free to operate without private or governmental interference, each sub-market and the market in general should, in principle, regulate themselves according to the laws of supply and demand.
One of the sub-markets of the general market for goods and services is the Jamaican real estate market. Although the real estate market differs in many ways from other markets, it acts like all markets in terms of supply and demand developments, but with a slower response time. It has the appearance of a single and simple entity while the real estate market is itself composed of many complex sub-markets. This also includes houses for rent in Jamaica. This would be known as a parent category.
Real estate is a commodity in the same way as wheat, gold and sugar. By combining the other factors of production with the land, we can produce wheat, gold and sugar or buildings.
Main sub-markets of Jamaica Real Estate
Most authorities agree that the five main sub-markets of Jamaican real estate are:
1. Houses for rent in Jamaica;
5. Government and Special Purpose Properties
Each of these five categories is then divided into minor sub-markets. For example, "residential" as the main sub-market may itself be divided into minor sub-markets, as follows:
2. suburbs; and
Each of the minor sub-markets can be divided into one family and several families, which can then be classified as occupied by the owner and as rental. The bottom line is what appears to be a large but simple real estate market, it is actually a complex structure composed of many individual sub-markets, each of which contributes to the global market.
The characteristics of the real estate market
If the real estate market were allowed to operate without any interference or constraint, each person could use his property in any way that would produce the best return. This could result in the use by one person of Jamaican property, resulting in the loss of value of another person's property. Obviously, we can not allow land to be used for purposes that the owner thinks best for his or her personal gain.
For example, if you lived in an upscale residential subdivision that was very popular and your neighbor bought two undeveloped land adjacent to your property for use as a barn or paper mill with its unpleasant odors, then the social costs for you and the rest of the population. the subdivision would far exceed the private gain for your neighbor. As a result, the real estate market can not be operated without controls or restrictions.
The list below lists five main characteristics affecting the property and sale that distinguish real estate from other markets.
1. The market is local in nature; the product is still.
2. The response to the evolution of supply and demand is slow.
3. There is a relative permanence of improvements; the earth is durable and fixed in place.
4. The market is not organized and is without central control; there is no standard product and no central information.
5. Government controls influence the market through zoning, building codes, taxes, etc.
Local in Nature – The real estate market is of an unusual nature compared to other markets. The reason is, of course, that the land and the improvements made to it are immutable. For example, we can not move sugarcane lands from Westmoreland to Kingston. If we were in the tomato market, we could move our products to where the demand could be the strongest. However, despite the demand for housing in Zone A, we can not produce a complex of apartments or single-family subdivisions on land located in Zone B and bring it where the demand is strongest .
Slow response – The real estate market is exceptionally slow to respond to changes in supply and demand. Very often, the number of houses (supply) in a region starts to fall below demand, however, as the design, land acquisition, site preparation and real estate construction phases take so much time when the demand responds to the market is flooded. The balance between supply and demand is therefore destroyed because the supply of townhouses exceeds the demand of the time.
Permanence of Improvements – The feature called permanence improvements is also closely related to the above features. The typical bungalow accommodation has a long economic life compared to other products. Once we have built a block of offices, we are trapped when we might have been able to invest our time and money in a hotel. Therefore, the permanence of the improvements created eliminates many alternatives available in the markets.
Decentralized Character – Another characteristic of the real estate market is the lack of a single central exchange system to deal with the real estate island as a whole. If one wants to buy 100 shares of General Motors, California, the product will be the same as that of General Motors, Florida. However, if one wishes to purchase 100 acres of oceanfront property in Westmoreland, Jamaica, the product will be different in many ways from the oceanfront property in Portland. This focuses attention on the two main reasons why there is no central exchange for real estate.
First, the product can not be standardized. There are not two identical lands. Even two lands side by side in a street have different geographical locations on this earth. This concept is called heterogeneity or non-homogeneity.
Secondly, no central database or source of information describes all properties in Jamaica. In addition, you must be careful when you use property information in one area to evaluate properties in another. If you want to know real estate located in any place, it is best to go there and search for local information.
Government Controls – The fifth and final key feature of the real estate market, government controls, plays an extremely important role compared to other markets. Most people are familiar with direct controls, such as zoning and building codes, that govern the construction and use of property.
Governments also exercise indirect controls, such as central government monetary policies. For example, if the government cuts the entire money supply to slow down the rate of inflation, the higher rates of mortgage bans are reflected, push many potential buyers to leave the market real estate in Jamaica. This has a significant impact on the drafting of a lease in Jamaica.