Election Called: Both Parties Promise Housing as Jamaica Heads to the Polls — December 2011

Publication Date: December 3, 2011 | Coverage Period: November 3 – December 2, 2011 | Category: Monthly Review

December in Brief

• Election date confirmed for December 29; Jamaica Labour Party and PNP in full campaign mode
• Both parties deploy housing and NHT reform as central planks of their platforms
• Holness JLP pitches homeownership expansion; Portia PNP promises NHT access reform
• Property market transactions slow as buyers await post-election policy clarity
• Eurozone stress continues; European recession fears weigh on global outlook
• Remittance flows seasonally elevated as diaspora supports holiday household spending

Housing Market Overview

Jamaica’s housing market has entered its most politically charged phase in several years. With the general election confirmed for December 29, the property sector is operating against a backdrop of heightened rhetorical activity from both major parties and a corresponding caution among buyers and developers who are rational to await the outcome before committing to significant financial decisions.

Transaction activity in November was modest by any measure — a pattern consistent with pre-election hesitation that has been observed in previous cycles. The Corporate Area market remains the most liquid segment, with properties in established Kingston neighbourhoods and the Half Way Tree to New Kingston corridor continuing to attract motivated buyers who have less reason to defer on the basis of election uncertainty. Outer-parish markets, particularly in the development corridors of St. Catherine and Manchester, are more directly dependent on NHT scheme activity and therefore more sensitive to the policy signals that the incoming government will provide.

The rental market, often a reliable indicator of underlying demand, continues to absorb those who cannot currently access ownership. Rental yields in Kingston have remained broadly stable, supported by the steady flow of professionals, young families, and students who require urban accommodation but lack access to mortgage financing. The gap between the aspirational demand for ownership and the supply of affordable, mortgageable product is one that the coming political season will be asked to address in concrete terms.

Government Policy and Campaign Platforms

The election campaign has given Jamaica’s housing debate unusual prominence in the national conversation. Both parties have positioned the National Housing Trust and affordable housing delivery as priority issues, recognising the resonance of homeownership aspiration among the working Jamaicans who constitute the decisive electoral constituency.

Prime Minister Andrew Holness and the JLP are campaigning on a platform of expanded homeownership access, with particular emphasis on making the NHT’s mortgage pathways more accessible to younger Jamaicans and those in the emerging middle class. Holness has spoken of home ownership as a cornerstone of family stability and national development — language that resonates with his own biographical narrative as a Jamaican who used education and determination to advance.

Opposition leader Portia Simpson Miller and the PNP are countering with a platform that emphasises NHT governance reform and expanded access for lower-income contributors who have historically been underserved by the Trust’s scheme allocations. The PNP has criticised the JLP’s stewardship of the NHT, arguing that the Trust’s considerable resources have not been deployed with sufficient focus on the neediest contributors. Portia’s campaign language consistently frames housing access as a social justice issue, not merely an economic one — a positioning that has historical roots in the PNP’s ideological tradition.

For the NHT itself, the campaign period is one of operational continuity rather than strategic innovation. The Trust continues processing applications and advancing scheme completions, but major new policy announcements are unlikely before the election outcome is known and a new administration — whichever party prevails — has had the opportunity to conduct its own review of the institution’s priorities and programmes.

Construction and Development

Private sector construction in November maintained the cautious profile that has characterised most of 2011. Developers with shovel-ready projects in approved schemes are advancing where site and financing conditions permit, but new project commitments are being held back pending the resolution of political uncertainty. The pre-election period also introduces considerations about government procurement and public works spending, which can be muted as outgoing administrations manage expenditure in the run-up to a poll.

Material costs present an ongoing challenge. The J$90–96 per US dollar exchange rate continues to inflate the Jamaican dollar cost of imported inputs, and while local manufacturers — Caribbean Cement in particular — provide some domestic supply of key materials, the construction sector remains significantly exposed to import price dynamics that are themselves affected by the global economic situation, including the Eurozone crisis’s impact on commodity demand and shipping costs.

Major Developments

Several NHT and HAJ housing schemes remain in active delivery across the Corporate Area and St. Catherine. The inner-city housing initiatives in Kingston — targeting communities in West Kingston and surrounding areas — continue to advance, with units in various stages of completion. These programmes represent a commitment of significant public resources and their completion is closely watched by communities that have long been promised improved housing conditions.

The Tourism Enhancement Fund-supported visitor accommodation pipeline in Montego Bay and Ocho Rios continues to add to hospitality supply, a development that has indirect effects on local rental markets as hospitality workers seek affordable residential accommodation in proximity to employment centres.

Infrastructure

Road infrastructure in proposed new development corridors remains inadequate for the scale of housing delivery that is planned over the medium term. The National Works Agency continues to advance road improvement projects, though the pace is constrained by the same fiscal pressures that limit the broader public capital expenditure programme. Water and sewerage infrastructure in outer-ring development areas presents a similar challenge, with the National Water Commission’s capital programme running behind the requirements of planned residential schemes.

Investment Climate

Investors in Jamaican real estate are in wait-and-see mode as the election approaches. The fundamental investment thesis — demographic demand, supply undersupply, the J$ inflation hedge that property provides — is intact, but the immediate catalyst for increased deployment is absent pending political clarity. Foreign investors, including diaspora buyers and a small but significant cohort of international buyers focused on the tourism-adjacent market, are monitoring the situation but are not likely to transact at scale before the new year.

Diaspora and Remittances

December is seasonally the strongest month for remittance inflows, as diaspora families in North America, the United Kingdom, and elsewhere send funds to support Christmas celebrations, school-related expenditures, and family maintenance. This annual surge in remittance flow temporarily elevates the level of discretionary spending in Jamaican households and historically translates into some increased activity in home renovation, improvement, and the purchase of appliances and furnishings for homes under construction or recently acquired.

Diaspora interest in the election is high. The December 29 poll will attract close attention from Jamaicans abroad who maintain financial and emotional ties to the island and who are acutely interested in the policy direction the new government will pursue, particularly on NHT access, property taxes, and the investment climate for diaspora homeownership.

Affordability

The affordability debate is at the centre of the election campaign’s housing dimension. Both parties are acknowledging what analysts and housing advocates have long argued: that the gap between what working Jamaicans can finance and what the market currently delivers as available inventory is wide and not narrowing. The NHT’s concessionary rate structure provides critical relief for formal-sector contributors, but the majority of housing demand — concentrated in the lowest income quintiles — is served inadequately even by the Trust’s most generous terms, given the cost of land and construction relative to income levels.

Regional Context

The Caribbean region’s attention to Jamaica’s election cycle is characteristic of the interconnected nature of the regional community. CARICOM partners recognise that Jamaica’s policy direction on economic management, fiscal consolidation, and social investment has implications for regional financial stability and mobility. The election’s outcome will also shape Jamaica’s posture in regional housing and development cooperation forums, where the island has historically played an active role.

Looking Ahead

The December 29 election is now weeks away. Regardless of outcome, the new year will bring a new government’s housing agenda into clearer focus. Whichever party takes office will inherit an NHT with substantial resources, a housing deficit of 100,000-plus units, a constrained fiscal environment, and a population that regards homeownership as a fundamental aspiration. The January 2012 edition of this review will assess the early signals from whichever administration emerges from the electorate’s verdict.