Kingston, Jamaica — 1 March 2020
COVID-19 has arrived in Jamaica. The first imported case was confirmed in Kingston on 10 March, and within days the government had activated emergency response measures that are already beginning to affect economic activity across the island. The property market, which had been operating with confidence through the first months of 2020 on the back of low interest rates, improving mortgage availability, and sustained demand from the diaspora and returning residents, is now facing uncertainty about its near-term trajectory. Transactions that were in progress are pausing. Viewings have been suspended. And the question of how a period of economic disruption will interact with a market that was already showing some of the characteristics of an extended run of price appreciation is one that both buyers and sellers are now asking.
The Immediate Disruption
The practical disruption to property transactions in the early weeks of the pandemic is being felt across every stage of the purchase process. Attorneys working from home are managing workloads with reduced staff. The National Land Agency, which must process title transfers, has restricted public access to its offices. Valuers and surveyors are navigating movement restrictions that make site visits difficult. Mortgage applications that require documentation from employers are being delayed as businesses adjust to remote working. And the fundamental confidence question, whether to commit to a major financial obligation at a moment of exceptional economic uncertainty, is prompting many buyers who were close to proceeding to pause and reassess.
The construction sector, which had been active through 2019 and into early 2020, is also feeling the disruption. Building sites are operating with reduced workforces where movement restrictions allow them to operate at all. Materials supply chains, already vulnerable to external shock, are being complicated by disruptions at ports and to shipping schedules. Projects that were expected to reach completion and market in 2020 are likely to be delayed, reducing the available supply of new units at a time when the dynamics of the broader market are already uncertain.
The Long-Term Demand Case
What the pandemic does not change is the structural demand case for Jamaican property. The housing deficit is not smaller because of COVID-19. Household formation continues. The diaspora’s interest in property on the island has not evaporated. And the low interest rate environment that the Bank of Jamaica has maintained to support the economy through the disruption creates, paradoxically, some of the most favourable mortgage conditions the market has ever seen. Those conditions will not be accessible to buyers who have lost income, or whose employment security has been compromised by the pandemic. But for buyers who remain financially stable, the combination of market uncertainty, paused competition, and historically low borrowing costs may eventually present an opportunity that the disruption itself has created.
What the Next Months Will Show
Jamaica’s property market has survived recessions, financial crises, and natural disasters. The pattern in each case has been contraction followed by recovery, with the recovery underpinned by the structural reality that Jamaica is a small island with constrained supply, persistent demand, and a population for whom property ownership carries cultural weight that extends beyond its financial dimensions. Whether the COVID-19 disruption follows that pattern, and how long the transition from disruption to recovery takes, will depend on how the pandemic’s economic consequences unfold in a country that entered this period with a property market that was, by most measures, in reasonably good health.
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