Publication Date: 3 December 2016 | Coverage Period: 3 November–2 December 2016 | Category: Monthly Review
November in Brief
- Donald Trump elected 45th President of the United States on 8 November in a result that shocked global markets.
- USD strengthens sharply post-election; JMD weakens against dollar as currency markets reprice.
- Jamaica diaspora in US faces uncertainty over immigration policy under incoming Trump administration.
- US stock markets volatile then rally on infrastructure spending expectations; real estate sentiment mixed.
- Jamaica’s BOJ and economic team publicly monitoring implications for remittances and tourism.
- Domestic property transactions maintain year-end momentum; Kingston market closes out strong November.
Housing Market Overview
November 2016 will be remembered in Jamaica — and across the world — as the month Donald Trump won the American presidency. The result, announced in the early hours of 9 November after a night of dramatic vote counts across swing states, was a shock to financial markets, political establishments and diaspora communities from Kingston to London. For Jamaica’s property market, the Trump victory introduces a set of considerations that were not in the base case as recently as three weeks ago.
On the domestic front, the property market maintained its year-end momentum through November. The Kingston apartment corridor continued to see transaction activity. NHT lending volumes held up. Portmore and its St Catherine surrounds maintained construction progress across active schemes. The fundamentals of Jamaica’s housing market — a 100,000-unit deficit, low interest rates, an active NHT programme — did not change on 8 November. But the external environment for the market’s most important diaspora buyer segment changed materially.
Trump’s Victory: Immediate Implications for Jamaica
The initial market reaction to Trump’s victory was swift and severe. The US dollar strengthened sharply against most major currencies as markets repriced for a more inflationary US policy environment — driven by Trump’s promises of large-scale infrastructure spending, corporate tax cuts and trade tariffs. For Jamaica, a stronger US dollar has a double-edged character: it makes US dollar-denominated debt more expensive to service in Jamaican dollar terms, but it also means that remittance flows from the US, when converted to JMD, are worth more per dollar sent.
The more significant concern for Jamaica’s policymakers is immigration. Trump campaigned on a promise to crack down on undocumented immigrants in the United States — a policy commitment that, if pursued aggressively, could reduce the number of Jamaicans resident in the US, curtail their remittance-sending capacity, and reduce diaspora wealth available for property investment in Jamaica. Jamaica’s remittance inflows from the US represent more than two-thirds of total inward flows and are equivalent to a significant share of GDP. Any material reduction in those flows would be felt across the economy.
At this stage, the precise shape of Trump’s immigration policy is unclear. Campaign promises and presidential reality are often different things, and the transition period between election and inauguration — during which Trump assumes office on 20 January 2017 — will provide further signals. Jamaica’s government has adopted a watch-and-engage posture, monitoring developments closely while avoiding premature conclusions.
The Diaspora Property Market Under New Uncertainty
For the Jamaican diaspora in the United States — the country’s largest and most economically active overseas community — the Trump result has generated a complex mix of anxiety and recalibration. Undocumented Jamaican residents face the most immediate uncertainty: Trump’s campaign rhetoric suggested an aggressive deportation programme that, if implemented, would disrupt hundreds of thousands of Caribbean households whose remittances are life-critical for families at home.
For documented diaspora Jamaicans — permanent residents and citizens — the near-term concern is more about the economic trajectory of the US under Trump’s policies. A strong US economy typically translates into strong remittance flows and diaspora property investment; a weakening US economy, whether from trade disruption or policy uncertainty, could reverse that dynamic. Markets are currently pricing for the former — infrastructure-led growth, higher corporate earnings — but uncertainty is elevated.
Property agents working with US diaspora clients report that the election result has not immediately triggered a withdrawal from the Jamaica market. Some buyers are taking a wait-and-see approach on the US policy environment; others are concluding that the unchanged Jamaican fundamentals — deficit, low rates, stable legal environment — make now as good a time as any to proceed. The market is processing the shock without, so far, experiencing a measurable transaction slowdown.
Government Policy
The Holness administration’s response to the Trump election was measured. Senior ministers have signalled Jamaica’s intention to maintain constructive relations with the incoming US administration, and the economic team has publicly noted its monitoring of the implications for remittances and tourism. Jamaica’s dependence on the US — for tourists, for remittances, for trade relationships — makes a cautious diplomatic posture the logical default.
On the domestic housing front, the NHT Strategic Mandate Review continues its deliberations, with the Holness government maintaining its year-long commitment to expanding housing supply and improving the affordability framework. The BOJ maintained its accommodative rate stance through November — no tightening is anticipated in the near term, providing continued support for mortgage lending.
Construction Activity
Construction across Jamaica’s residential sector maintained its pace through November. Year-end pressures — both from developers seeking to meet completion targets and from buyers aiming to move before the holiday period — sustained activity levels. Portmore’s active schemes continued, Kingston’s apartment pipeline progressed, and NHT Joint Venture projects across multiple parishes advanced through their respective development stages.
Input costs remained manageable. Oil prices, which have edged upward from summer lows but remain well below the $100+ levels of 2013–14, continued to provide meaningful cost relief across the supply chain.
Major Developments
Several residential schemes across the island reached or approached completion milestones during November, with buyers settling into new homes before the year-end. NHT-financed transactions remained the backbone of first-time buyer activity. The private mid-market segment continued to attract diaspora interest despite the US election uncertainty, with North American buyers and returning residents maintaining inquiries on schemes across Kingston, St Andrew and the north coast.
Infrastructure
Infrastructure investment discussions remained on the government’s agenda through November. The fiscal programme’s constraints on capital expenditure require prioritisation; residential development corridors requiring road and utility upgrades compete for limited budget allocation. The government’s stated commitment to enabling residential development through infrastructure is expected to translate into targeted capital deployments in 2017.
Investment Climate
Jamaica’s domestic investment climate remained constructive through November. Tourism metrics for the full year 2016 were tracking ahead of 2015 — a positive signal for resort and coastal property values. Fiscal performance continued to track in line with IMF programme targets. The external shock of Trump’s election created uncertainty but did not materially disrupt the domestic economic metrics that support the property market.
Diaspora
The November election result means Jamaica’s two primary diaspora property buyer segments now face different external headwinds. The UK diaspora is contending with Brexit’s currency aftermath — a pound that remains roughly 10–12% below pre-referendum dollar parity. The US diaspora is now contending with political uncertainty around immigration and the US economic trajectory under Trump’s leadership. Neither headwind is fatal to Jamaica’s property market; both are real and material.
The Canadian diaspora — smaller but significant — faces no comparable shock, and the Canadian dollar remains broadly stable. Agents with Toronto and Montreal-based client networks report continued engagement levels consistent with the pre-election period.
Affordability
Domestic affordability conditions remained broadly intact through November. NHT rates at 0–5% and commercial mortgage rates at 7–9% continued to support first-time and move-up buyer activity. The JMD’s modest weakness against a strengthening US dollar — driven by the post-Trump dollar rally — added a marginal inflationary note to import costs, including construction materials; the effect on housing prices is limited but bears monitoring.
Regional Context
Across the Caribbean, the Trump election result generated responses ranging from concern to cautious optimism depending on each country’s specific exposure. CARICOM states with large US diaspora communities and US tourist dependency — Jamaica, Barbados, Trinidad — all face the same underlying uncertainty. Regional economic bodies including CARICOM and the Caribbean Development Bank are expected to assess the implications over the coming months.
Looking Ahead
The key watch items heading into year-end and early 2017 are the signals coming from the Trump transition team about immigration enforcement priorities, trade policy specifics and the timeline for the infrastructure spending programme that markets are currently pricing as growth-positive. Jamaica will need to assess each of those signals for its specific implications for remittances, tourism and diaspora investment.
Domestically, the year closes with Jamaica’s housing market in better structural shape than it was at its start. The new JLP government has signalled its housing commitment, NHT has maintained its lending programme, commercial rates have remained competitive, and the market has absorbed two major external shocks — Brexit in June and Trump’s election in November — without fundamental disruption to its underlying dynamics. That resilience is a testament to the depth of Jamaica’s housing demand and the structural supports that have been built over years of policy evolution.
2017 opens with uncertainty about Washington and London; it opens with clarity about Jamaica’s housing deficit, its NHT programme, its construction pipeline and its diaspora’s long-term attachment to home. Those are the fundamentals that will ultimately drive the market’s trajectory.
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