Jamaica Real Estate Roundup — Q4 2006: Christmas at the Boom’s Height, Strong Diaspora Season, and the North Coast’s Most Productive Holiday Period

• Christmas diaspora season at boom period’s most energetic; property enquiries at cycle high.
• North Coast holiday period records peak occupancy; resort investment paying dividends.
• Kingston premium and mid-market both sustaining strong Q4 momentum.
• Portia Simpson Miller PNP government: stable political backdrop to boom conditions.
• Property market enters 2007 with its most confident outlook in the modern era.

The fourth quarter of 2006 delivers the Jamaica property market its most productive Christmas and New Year season within an extended boom that has been building since the early years of the decade. The diaspora community’s December 2006 presence on the island — the annual reconnection with family, community, and property market that the Jamaican overseas community’s December visits represent — is energised in 2006 by the confluence of the boom period’s accumulated confidence, the sustained appreciation track record that the market’s preceding quarters have generated, and the currency advantage of overseas earnings that the Jamaican dollar’s long-term depreciation against the major reserve currencies continues to provide. The result is a Christmas season whose property market dimensions — measured in viewing volumes, enquiry quality, offer submissions, and completed transactions — are the most productive in the modern market’s experience.

The Portia Simpson Miller PNP government’s stewardship of Jamaica’s economic management through 2006 has provided the property market with the political stability that the boom conditions require, and the economic performance that has been delivered through the PNP’s continued governance has been consistent enough with the growth cycle’s requirements to sustain the confidence environment that the boom’s continuation depends on. The property market’s assessment of the political landscape as Q4 2006 draws to a close is one of comfortable stability, with the election that must eventually be called representing a future variable whose outcome the market’s participants are monitoring with the moderate attention that a functioning democracy’s electoral cycle warrants without generating the uncertainty premium that a more contested or consequential political moment would produce.

The Christmas Diaspora Season

The December 2006 diaspora season’s property market performance was the fullest expression yet of the boom period’s accumulated confidence in the Jamaican-born overseas community’s engagement with the island’s property market. The buyers who arrived in December 2006 were doing so in the context of a global economic environment whose benign conditions — solid employment in the North American and British economies, reasonable household income growth in the diaspora’s most concentrated occupational sectors, and consumer confidence at levels that supported the discretionary capital deployment that a property purchase represents — were as supportive as the diaspora property buyer’s external conditions had been in the decade’s run. The diaspora community’s property market engagement through December 2006 and into the new year’s opening days was generating the enquiry and transaction pipeline that the Q1 2007 winter season would convert into the deals that the early part of the coming year’s transaction calendar depended on.

North Coast: Holiday Period Peaks

The North Coast resort communities’ Q4 2006 Christmas and New Year holiday period delivered the occupancy performance that the resort expansion of the preceding decade had been building toward. The major all-inclusive properties in the Montego Bay and Negril corridors were operating at or near capacity through the holiday weeks, generating the visitor experience quality and the revenue per available room that sustained the investment case for the continued resort expansion whose development pipeline was producing the North Coast’s next generation of property market offering. The international buyers who were experiencing Jamaica’s North Coast at its holiday season peak were generating the enquiry pipeline that the coming year’s international property transactions would draw on, and the estate agencies and developers serving the North Coast’s international market were entering the new year with their most active forward enquiry books.

Kingston’s Year-End Performance

Kingston’s residential market’s Q4 2006 performance maintained the premium segment’s sustained appreciation and the middle-market’s active transaction pace through the Christmas season’s diaspora energy. The established residential communities’ premium properties were completing the year’s fourth quarter at prices that confirmed the decade’s appreciation cycle’s continued momentum, and the middle-market segment’s year-end transaction activity was sustaining the volumes that the boom period’s improved financing conditions had been supporting through the preceding several quarters. The Kingston market entered 2007 in the fullest expression of the boom cycle’s conditions, with the premium segment at decade-high pricing and the middle market at its most accessible since the fiscal constraint period’s end.

Year-End Assessment: The Boom’s Maturity

The fourth quarter of 2006 closes with the Jamaica Roundup’s year-end assessment being the most unambiguously positive in the publication’s history. The boom that has been building through the decade’s growth cycle is at its mature peak, expressing itself across every major market segment with the mutual reinforcement of structural drivers whose alignment is as favourable as it has been at any point in the modern market’s experience. Tourism is growing, diaspora demand is at its most engaged, international investment is committed, domestic conditions are more supportive of middle-market demand than the preceding decade allowed, and the political environment is stable. The property market that enters 2007 is the strongest in the modern era, and the year ahead is expected to sustain the conditions that the year concluding has delivered.

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