Publication Date: August 3, 2019 | Coverage Period: July 3–August 2, 2019 | Category: Monthly Review
Month in Brief
- Jamaica’s tourism sector on course for record arrivals and earnings in 2019, supporting housing demand.
- NHT Union Acres and Catherine Estates joint venture schemes progressing in St James and St Catherine.
- Gated community development accelerating in St Andrew, St Catherine, and St James parishes.
- Atlantic hurricane season active; 2019 season tracking above average in storm formation.
- BOJ policy rate remains at accommodative level; inflation within target band near 4%.
- Diaspora property expo circuits in Toronto and London generating sustained developer leads.
Housing Market Overview
Jamaica’s housing market continued to perform strongly through July, buoyed by the twin engines of a record-breaking tourism sector and steadily improving macroeconomic conditions. Residential property values in the Kingston Metropolitan Area and the major western parishes sustained their upward trend, with agents reporting healthy transaction volumes and brisk activity at open house events for new developments.
The linkage between tourism performance and housing demand has become an increasingly explicit feature of the market narrative. Jamaica is on track in 2019 to welcome more stopover visitors and earn more foreign exchange from tourism than in any previous year. This is generating direct employment across St James, St Ann, Westmoreland, and Portland, and that employment base translates into housing demand — both for rental accommodation near hotel and resort clusters and for home purchase by workers ascending the income ladder.
Nationally, Jamaica’s housing deficit of more than 100,000 units persists as the dominant structural feature of the market. Supply additions, while meaningful, have not been sufficient to bring demand and supply into balance. The consequence is a seller’s market at most price points, with first-time buyers facing the most acute constraints.
Government Policy and NHT Activity
The National Housing Trust continued its active construction and scheme delivery programme during July. The Union Acres joint venture project in St James — developed in partnership with the Jamaica Civil Service Association and the Jamaica Confederation of Trade Unions — represents a model of multi-stakeholder housing delivery that the NHT has been seeking to replicate. Similarly, the Catherine Estates development in St Catherine continues to provide new units for NHT contributors in one of the island’s highest-demand corridors.
The NHT’s Guaranteed Purchase Programme, under which the Trust commits to purchase completed units from qualifying developers at pre-agreed prices, has provided important certainty to developers and contributed to the forward pipeline of affordable housing. The programme helps de-risk construction finance for smaller developers who might otherwise struggle to secure commercial funding for NHT-targeted product.
The broader infrastructure upgrading initiative — targeting 49 NHT schemes across all parishes at a cost of over J$2.5 billion — continued to advance. In St James, works at Farm Heights and Pitfour schemes remained in progress, with the improvement of roads, drains, and common areas intended to enhance property values and resident satisfaction across these communities.
Construction and Development Activity
Private sector construction was notably active during the period. Gated residential communities — offering security, managed common areas, and modern amenities — continued to attract strong buyer interest across income tiers. At the upper end, developments in the Norbrook, Cherry Gardens, and Barbican areas of St Andrew sustained demand from the professional and investor classes. At the mid-market, new townhouse communities in Portmore and surrounding areas of St Catherine offered accessible price points for first-time buyers supplementing NHT loans with commercial top-up financing.
In Montego Bay and environs, developers were active on multiple fronts. Residential projects catering to the hospitality workforce ranged from modest apartment complexes to more aspirational townhouse schemes targeting middle management. The growth of the city’s economy — driven not just by tourism but by the expanding free zone and back-office services sector — has diversified the demand base for residential property in the western hub.
Hurricane Season Awareness
The 2019 Atlantic hurricane season is tracking above the long-term average in terms of named storm formation, consistent with forecasts issued by the US National Hurricane Center and the Colorado State University tropical weather group at the start of the season. August through October represent the peak months for hurricane activity in the Caribbean, and Jamaica — situated in the traditional storm corridor — is monitoring developments closely.
For the housing market, hurricane season awareness has practical implications for developers, lenders, and homeowners alike. Insurers have been pressing for higher standards of construction resilience, and some newer developments are explicitly marketing wind-resistance and storm-proofing as differentiating features. The Office of Disaster Preparedness and Emergency Management (ODPEM) has updated its public guidance for household preparation, including advice on structural assessment of older housing stock.
The Caribbean Disaster Emergency Management Agency (CDEMA) has been coordinating regional preparedness. The memory of Gilbert (1988) and Ivan (2004) remains vivid in Jamaica’s institutional consciousness, and these precedents inform both individual preparation and government policy on building standards.
Investment Climate and Finance
Jamaica’s macroeconomic environment remains broadly supportive of the property market. The Bank of Jamaica’s policy rate has been held at an accommodative level, with inflation running at approximately 4% — close to the midpoint of the BOJ’s 4–6% target band. This has maintained the incentive for commercial lenders to offer mortgage credit on competitive terms, though rates remain in the 8–9% range for standard residential products.
The IMF Stand-By Arrangement, under which Jamaica has been implementing a comprehensive programme of fiscal and structural reform since 2016, is approaching its scheduled conclusion. The sixth and final review under the programme is expected in the latter part of 2019. Jamaica’s strong adherence to programme targets — including a primary budget surplus of approximately 7.5% of GDP — has been cited by the Fund as a model for emerging market fiscal adjustment. This track record has supported investor confidence and underpinned stable exchange rate conditions.
The Jamaica Stock Exchange remained active, with Real Estate Investment Trusts (REITs) and property-linked securities attracting interest from retail and institutional investors. The broadening of investment vehicles available to Jamaicans seeking real estate exposure is a positive structural development, allowing participation in property market upside without the barriers of direct property purchase.
Diaspora and International Buyers
The diaspora buyer circuit remained active during July. Property exhibitions and promotional events in Toronto, London, and New York continued to generate enquiries for Jamaican developers. JN Bank and the Jamaica National Group maintained their focus on non-resident Jamaicans, offering tailored mortgage and financial planning packages to facilitate property purchase from abroad.
Currency dynamics have been broadly favourable for diaspora buyers holding US or Canadian dollars or pounds sterling. With the Jamaican dollar in a managed float environment, the effective purchasing power of diaspora savings in Jamaica has been maintained or modestly enhanced relative to recent years. This dynamic reinforces the attractiveness of Jamaican property as a store of value for the overseas community.
Affordability and Market Access
The gap between market-rate and NHT-financed housing costs remains the defining affordability challenge. For a standard two-bedroom unit priced around J$12–16 million, the monthly payment differential between an NHT loan (0–5%) and a commercial mortgage (8–9%) is significant — often the difference between an affordable and an unaffordable payment for a household on the Jamaican median wage.
Efforts to expand joint-financing arrangements — whereby NHT funds are combined with commercial bank top-up loans to purchase units above the NHT ceiling — have been a useful incremental measure. However, as NHT coverage ceilings have risen, so too have market prices, a dynamic that some analysts describe as a structural feedback loop requiring more fundamental policy attention.
Looking Ahead
The immediate outlook for the Jamaican housing market is constructive. Demand fundamentals are strong, financing conditions are relatively accommodative, and construction activity is broadly healthy. The principal risks in the near term are external: the active hurricane season and any deterioration in the global economic environment that could affect tourism earnings or remittance flows.
The conclusion of the IMF Stand-By Arrangement later in 2019 is anticipated to mark a significant milestone for Jamaica’s economic management. A successful programme exit would reinforce market confidence and potentially open new channels for project financing at improved rates. The housing sector stands to benefit from this broader economic validation.
The next quarter will be critical for monitoring hurricane season developments. Jamaica Homes will track any storm-related impacts on the residential market, construction timelines, and insurance costs, and will report developments as they emerge.
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