- September 11: attacks on the United States twenty-one days ago; the world has changed.
- North Coast international market in immediate shock; transatlantic travel environment disrupted.
- Pre-September 11 Q3 performance: July and August delivered the boom’s strongest summer yet.
- Diaspora community’s December return is the immediate question the property market cannot yet answer.
- Property market assessed honestly: the disruption is severe, its duration genuinely unknown.
This edition of the Jamaica Real Estate Roundup goes to publication twenty-one days after the September 11 attacks on the United States, and it is impossible to write a property market assessment for the third quarter of 2001 without placing those attacks at the centre of every observation this publication is capable of making. On September 11, 2001, coordinated terrorist attacks destroyed the World Trade Centre in New York, struck the Pentagon, and ended the lives of nearly three thousand people. The attacks changed the world in ways that are still being absorbed, and the Jamaica property market’s assessment twenty-one days later must be honest about the limits of what can be known this close to a disruption of this magnitude.
What can be said is this: the September 11 attacks disrupted the transatlantic travel environment on which the Jamaica property market’s two most important international demand streams — the North Coast’s international buyer and investor community, and the North American diaspora community whose winter return drives the annual cycle’s most important quarterly performance — depend with a severity and a suddenness that no prior external disruption in the modern market’s history has matched. The attacks occurred with twenty-one days remaining in the quarter that this edition covers, and the property market’s assessment of those twenty-one days is one of acute disruption: enquiries stopped, viewings were cancelled, planned visits were deferred, and the market’s participants absorbed in real time an event whose implications for the international landscape they understood intuitively before any analysis could be made.
Before September 11: The Summer That Was
The Jamaica property market’s July and August 2001 performance — the summer that September 11 interrupted — had been the most encouraging the boom cycle’s gathering years had yet produced. The North Coast’s summer tourism season was performing with the visitor volumes and investor engagement that the resort communities’ expanding infrastructure was designed to accommodate, and the international buyer community’s summer engagement with the North Coast’s residential and investment market was at the levels consistent with a boom cycle whose structural conditions were strengthening quarter by quarter. Kingston’s residential market had sustained the premium segment’s appreciation and the middle market’s transaction volumes through the summer with the confidence of a domestic market whose conditions the boom years were progressively improving. The summer of 2001 was, in short, the best summer the Jamaica property market’s modern boom had produced — and September 11 ended it in the most sudden and absolute way imaginable.
The Disruption: What September 11 Means for the Jamaica Property Market
The September 11 attacks’ impact on the Jamaica property market operates through two primary channels, both of which are severe and neither of which can be fully quantified twenty-one days after the events. The first is the transatlantic travel disruption: the American aviation system’s shutdown in the attacks’ immediate aftermath, the security environment’s fundamental change, and the general travel hesitancy that the attacks have generated in the American and international public whose willingness to fly across the Atlantic is the precondition for the North Coast’s international buyer community’s physical presence in the Jamaica market. Without transatlantic travel, the North Coast property market’s international dimension cannot function, and the travel environment’s recovery from the September 11 shock will be the primary determinant of when the North Coast’s international market can resume the activity that the summer months had been sustaining.
The second channel is the diaspora community’s December return. The Jamaican overseas community’s annual winter homecoming — the Christmas and New Year’s return whose property market dimensions are the boom cycle’s most important annual demand event — is now less than three months away. The question that the property market’s participants cannot yet answer is whether the diaspora community’s December return will be reduced by the September 11 attacks’ travel environment changes to a degree that materially affects the winter season’s property market contribution. The diaspora community’s connection to Jamaica is among the deepest and most structurally embedded demand drivers in the market’s experience, and there is reasonable basis for hoping that this depth of connection will sustain the diaspora’s December return to a greater extent than a more transactional investor community’s would. But hope is not certainty, and this publication will not pretend to a certainty that the facts do not support.
Honest Assessment Twenty-One Days In
The Jamaica property market’s honest assessment twenty-one days after the September 11 attacks is one that must acknowledge what is known, acknowledge what is unknown, and resist the temptation to resolve the tension between them with false confidence in either direction. What is known: the disruption is severe, the transatlantic travel environment has been fundamentally changed, the North Coast’s international market activity has ceased in the attacks’ immediate aftermath, and the boom cycle’s third quarter has ended on the most difficult note in the modern market’s history. What is unknown: how long the disruption will last, how deeply the diaspora community’s December return will be affected, how quickly the international travel environment will recover, and what the ultimate property market consequences of an event of September 11’s historical significance will be.
The P.J. Patterson PNP government’s response to the attacks’ Jamaica implications has been to maintain the stable economic management framework that the property market’s domestic conditions depend on, and to work with the tourism sector’s stakeholders on the recovery planning that the North Coast’s international market will require when the travel environment’s normalisation permits. The property market’s structural advocates point to the boom cycle’s demonstrated resilience through previous disruptions — through the financial sector crisis’ aftermath, through the economic adjustments of the late 1990s — as grounds for medium-term confidence that the structural demand drivers will survive September 11 as they survived those earlier challenges. The Roundup’s own assessment is that this medium-term confidence is reasonable, while the immediate-term uncertainty is genuine and must be acknowledged as such. The next edition will know more. For now, the property market is absorbing, and the absorbing is not yet done.
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