Publication Date: February 3, 2019 | Coverage Period: January 3 – February 2, 2019 | Category: Monthly Review
January in Brief
- January market rebounds sharply from December seasonal slowdown; buyer enquiries surge
- Kingston apartment sector sees heightened activity from young professional buyers
- Realtors report increase in property sales expected for 2019 versus 2018
- Short-term rental registrations remain a live policy debate; Airbnb growth continues
- NHT scheme allocations oversubscribed in multiple parishes; waiting lists growing
- Exchange rate trades at approximately J$128–133 per US dollar; broadly stable
Housing Market Overview
January 2019 delivered the expected rebound from December’s seasonal trough. Across Kingston and St Andrew, estate agents report that enquiry volumes in the first four weeks of the year have been strong, consistent with the pattern in which buyers who deferred decisions through the festive period re-enter the market with renewed energy and urgency in January. The consensus among agents is that 2019 will see a year-on-year increase in completed residential transactions — a confidence anchored in the sustained macro improvement and the structural imbalance between supply and demand.
The most animated segment of the market in the current coverage period is the Kingston urban apartment sector. New developments in New Kingston, Half Way Tree and Liguanea are attracting strong interest from young professionals — those in their late twenties and thirties, employed in the financial services, hospitality management, telecommunications and professional services sectors, who are seeking urban homeownership without the maintenance burden of a traditional house-and-garden property. This demographic is reshaping the Kingston residential landscape in ways that were not evident a decade ago.
The traditional housing typology — the two-bedroom or three-bedroom concrete house with a yard, whether in a NHT scheme or in an older established residential area — remains the dominant product category nationally. But the apartment is growing in share, and the developers who have bet on this trend — bringing mid-rise and high-rise residential buildings to market in Jamaica for the first time at scale — are finding that the bet is paying off.
Government Policy and the NHT
NHT scheme allocations continue to be oversubscribed in most parishes. The January allocation cycles — in which prospective beneficiaries who have met contribution thresholds are selected through ballots for available scheme units — attract far more applicants than there are units available. This persistent oversubscription is the most direct evidence of the scale of unmet housing demand among the working population, and the clearest argument for expanding the Trust’s construction capacity.
The opposition’s critique of the J$11.4 billion annual transfer from the NHT to the Consolidated Fund has gained renewed salience in the context of these oversubscribed ballots. If billions of dollars that contributing members have paid in are being redirected to general government revenue, the argument goes, those same members are being denied the housing they were promised. The government’s counter-argument — that macro stability ultimately creates the conditions for more housing delivery — is coherent in principle but less viscerally compelling to a would-be homeowner who has been on a waiting list for years.
Construction Sector
Construction sites that slowed or paused for the Christmas and New Year period are largely back in operation. Activity in St Catherine — the parish with the largest concentration of NHT schemes currently under construction — is particularly evident, with multiple sites in the Portmore and Bog Walk corridors progressing toward completion. The NHT’s construction pipeline for the current fiscal year (April 2018 – March 2019) is tracking toward approximately 8,000 housing starts, a significant volume by historical standards.
Private sector construction activity is also sustained. Developers of gated residential communities in St James and Trelawny — where the tourism boom is generating the income and confidence that underpin residential demand — report that construction is progressing on plan. In Kingston, the apartment developers are navigating the particular challenges of urban construction: constrained sites, complex utilities connections, and the need to manage construction noise and disruption in established residential and commercial neighbourhoods.
Major Developments
The north coast residential market — Montego Bay and its surroundings in St James, and the Ocho Rios area of St Ann — continues to attract both local and diaspora buyers. The tourism economy’s strength has created a class of hospitality sector professionals who are well-paid by Jamaican standards and actively seeking homeownership. For these buyers, proximity to their place of employment and to the amenities of the tourism corridor — international restaurants, good roads, reliable utilities — is as important as the property itself.
The growing short-term rental market — driven by platforms such as Airbnb and VRBO — is adding a new dimension to both residential development and property investment. Properties in tourist-adjacent areas that can generate short-term rental income are commanding a premium over comparable properties without this potential. Investors are actively acquiring — and in some cases developing — properties specifically for the short-term rental market, a trend that is drawing regulatory attention.
Infrastructure
January brought renewed focus on utility reliability as a factor in residential property values and development viability. Power supply — the Jamaica Public Service Company’s distribution network — remains inconsistent in some growth areas, and developers of new residential schemes must factor in the cost of backup power infrastructure. The NWC’s water supply in some suburban growth corridors also remains stretched, creating both health and financing barriers for scheme completion.
Road infrastructure improvements continue under the MIDP programme. Several parishes that had seen long-deferred road works finally commence are reporting that the improvements — when completed — are having a measurable positive effect on residential land enquiries and values in affected areas.
Investment and Finance
The mortgage market’s January rebound mirrors the broader market pattern. Applications to commercial banks and building societies are up in the new year, and loan officers report a pipeline of pre-approval requests from buyers who are ready to move as soon as they identify a suitable property. The Bank of Jamaica’s monetary policy stance — broadly accommodative, with the policy rate in the 2.0–2.5% range — continues to support mortgage market activity by keeping lending rates at historically manageable levels.
VM Group and JN Bank — alongside NCB and the major building societies — are actively competing for diaspora mortgage business, with products denominated in both Jamaican and US dollars. The US dollar mortgage product, while carrying foreign exchange risk for Jamaican dollar earners, is particularly attractive to diaspora buyers who earn in the US or Canada and wish to match their currency exposure.
Diaspora
The diaspora market begins 2019 on a positive footing. US and Canadian diaspora buyers — benefiting from a strong North American economy and favourable exchange rates — are enquiring about Jamaican property at a healthy pace. The January period, when many diaspora-based Jamaicans return to the island for the holiday and New Year period, typically generates a wave of property viewings and enquiries that carries through into first-quarter transactions. Agents who specialise in diaspora buyers report a good January flow.
UK-based buyers remain cautious, however. The Brexit process is no closer to resolution than it was in December, with the UK parliament having rejected Prime Minister May’s withdrawal agreement in a historic vote in mid-January. The resulting uncertainty — about the future economic relationship between the UK and the European Union, about the pound’s value, and about the UK economy’s near-term trajectory — is keeping potential UK-based buyers on the sidelines.
Affordability and the Short-Term Rental Question
The growth of the short-term rental market raises an affordability question that is beginning to receive serious attention. When properties are taken out of the long-term rental market and listed on Airbnb at short-term rates — which can generate significantly higher annual income for landlords — the supply of long-term rental accommodation shrinks. In tourist-adjacent areas of Montego Bay and Ocho Rios, and increasingly in Kingston’s desirable residential neighbourhoods, tenants are finding fewer available long-term rental units and paying higher rents for those that remain.
The government and the Jamaica Tourist Board are in active discussion about a framework for registering and licensing short-term rental properties. Such a framework would serve multiple objectives: ensuring compliance with safety and quality standards, collecting tax revenue from the sector, and providing the data needed to monitor and manage the market’s impact on residential communities. The debate is unlikely to be resolved quickly, but the direction of policy — toward more formal regulation of the short-term rental market — seems clear.
Regional Context
In the broader Caribbean, Jamaica’s position as one of the region’s most stable and fast-growing tourism destinations continues to differentiate it positively. The tourism sector’s record arrivals in 2018 have generated sustained employment growth and income gains in the parishes most dependent on the sector. This translates directly into residential demand, both from employed Jamaicans seeking homeownership and from investors seeking tourism-adjacent property.
Looking Ahead
February 2019 is expected to sustain the momentum from a strong January. The mortgage market pipeline is healthy; the NHT’s construction programmes are advancing; and private sector developers report active pre-sales on new schemes. The urban apartment segment, in particular, is expected to continue its strong performance as young professional demand for Kingston urban product remains ahead of available supply.
The budget debate expected in the coming weeks will likely reignite the NHT transfer controversy, providing another round of political theatre on a policy question that cuts to the heart of what the Trust is for and who it serves. Whatever the political outcome, the market will continue to operate: buyers will buy, developers will build, and the structural gap between supply and need will continue to define the Jamaican property market’s character for the foreseeable future.
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