Publication Date: December 3, 2019 | Coverage Period: November 3–December 2, 2019 | Category: Monthly Review
Month in Brief
- Jamaica’s IMF programme graduation confirmed; fiscal credibility milestone celebrated by government and market.
- Tourism winter season in full swing; stopover and cruise arrival numbers on track for annual records.
- Housing market transaction activity remains robust through November; Christmas period expected to maintain momentum.
- NHT scheme completions and handovers recorded in multiple parishes through October and November.
- Diaspora Christmas visits driving interest in property viewings and purchase intentions for 2020.
- Commercial mortgage rate environment stable; JN Bank, VM Group, NCB all active in the market.
Jamaica’s Economy Closes 2019 in the Strongest Position in a Generation
The confirmation of Jamaica’s graduation from its IMF Stand-By Arrangement has provided a fitting capstone to a year of sustained economic progress. The sixth and final review, concluded in November, was marked by the Fund’s commendation of Jamaica’s adherence to programme targets and its structural reform achievements. From fiscal consolidation to financial sector strengthening, Jamaica’s performance under the programme has been among the most consistent of any comparable IMF engagement in recent memory.
The broader economic context is equally positive as 2019 draws to a close. GDP growth is tracking at approximately 1.5–2% for the fiscal year, reflecting the ongoing contribution of mining, construction, and services. Inflation is within the BOJ’s 4–6% target range. The exchange rate has been broadly stable, with the Jamaican dollar in a managed float that has limited sharp movements. Unemployment continues to fall from its historically elevated levels. Remittance inflows are running at approximately US$2.5 billion for the year, supporting consumption and savings across all parishes.
For Jamaica’s housing market, this macroeconomic context has been decisively positive. A growing economy with low interest rates, strong remittances, and high employment creates the conditions for sustained housing demand. The supply side — while improving through NHT and private sector construction — has not kept pace with demand growth, maintaining the seller’s market dynamic that has characterised the period.
Housing Market in November
Transaction activity in the residential property market remained solid through November, with agents and developers reporting continued buyer interest across all price segments. The post-hurricane season recovery in market activity that began in October has been sustained, and there are no indications of a significant year-end slowdown of the type that can sometimes dampen activity in December as buyers and sellers defer decisions across the holiday period.
In the Kingston Metropolitan Area, the supply picture remains constrained relative to demand. The pipeline of new apartment developments in New Kingston and surrounding areas continues to be tracked closely by the market, with buyers actively engaging developers at pre-sale stages in the expectation that prices will rise further upon completion. This dynamic — pre-sale activity at current prices as a hedge against future appreciation — is a feature of a market with a well-established upward price trend and limited prospects for rapid supply expansion.
In the west, the winter tourism season has brought the expected uplift in Montego Bay’s residential market. Hotel occupancy rates across the resorts of St James, Trelawny, and Hanover are reported to be running at or near capacity as the peak Christmas and New Year period approaches. The employment and income effects of this seasonal surge flow through into the local housing market, supporting both rental and purchase activity.
NHT Delivery and Policy
The National Housing Trust recorded scheme completions and handovers in several parishes through the October–November period. The Trust’s delivery record for 2019 — spanning both its direct construction programme and its Joint Venture and Guaranteed Purchase initiatives — represents one of the more active years in recent NHT history. The combination of a supportive budgetary environment, active private sector partnership, and a well-managed operational structure has enabled a meaningful volume of new units to reach beneficiaries during the year.
Looking forward to 2020, the NHT’s pipeline includes schemes at various stages of development across all fourteen parishes. The Joint Venture programme with private developers is expected to remain a primary delivery mechanism, alongside the Trust’s own construction activity. The review of the NHT loan ceiling — which has remained at J$6.5 million for single applicants since 2019 — is anticipated to be a topic of early 2020 policy discussion, given the upward pressure on construction costs.
Christmas Diaspora Market
The Christmas period consistently brings a significant uplift to the diaspora buyer segment of the Jamaican property market. Non-resident Jamaicans returning home for the holiday season typically use the opportunity to reconnect with family, assess their existing property holdings, and in many cases actively explore purchase options. Real estate agents across the island — particularly in parishes with significant diaspora connections such as St Andrew, Manchester, and Westmoreland — report heightened activity in the run-up to the Christmas break.
JN Bank and the Jamaica National Group have targeted the Christmas period with dedicated promotions, recognising that the combination of physical presence in Jamaica and heightened emotional connection to home makes this the highest-conversion window in the diaspora buyer calendar. The institutional infrastructure for diaspora property purchase — non-resident mortgage products, overseas account facilities, and property management services for absentee owners — has continued to improve, reducing the friction that has historically been a barrier for buyers managing transactions across jurisdictions.
Finance and Rates
The interest rate environment remained stable through November. Commercial mortgage rates stayed in the 8–9% range, with no indications of imminent movement in either direction. The BOJ’s accommodative stance — reflecting the central bank’s assessment that current inflation dynamics do not require a policy tightening response — has underpinned this stability. Mortgage lenders have been competing on service quality and processing speed rather than on price, reflecting the absence of rate pressure as a competitive variable in the current environment.
The NHT rate advantage — with concessionary rates ranging from 0 to 5% against commercial rates of 8–9% — continues to be the defining financial feature of Jamaica’s housing market. For a first-time buyer of a mid-market unit, the difference in monthly payment between an NHT mortgage and a commercial mortgage can amount to tens of thousands of Jamaican dollars per month — the effective price of market access for hundreds of thousands of Jamaican households.
Construction and Infrastructure
Private sector construction activity remained healthy through November. The peak of the construction season — which typically slows in late December as the industry takes an extended Christmas break — has not yet been reached, and developers across the island are pushing to maximise progress before the seasonal slowdown. In the corporate area, several major projects are targeting completion milestones before year-end or in the first quarter of 2020.
Infrastructure development continues to support the expanding residential frontier. The Southern Coastal Highway Improvement Project, which is opening up new areas of southern St Catherine and beyond to commuter-zone residential development, is among the most significant infrastructure investments with direct housing market implications. As travel times to Kingston from previously remote communities shorten, the effective supply of developable land within commuting distance of major employment centres increases — a structural support for the medium-term supply pipeline.
Affordability: The Persistent Challenge
Despite the broadly positive market narrative, the affordability challenge for lower-income Jamaicans remains acute. The housing deficit of more than 100,000 units is concentrated in the affordable segment, and while the NHT continues to deliver, the pace of delivery has not been sufficient to close this gap. The combination of rising land prices, construction cost inflation, and NHT ceiling constraints means that a growing number of working Jamaicans find themselves priced out of even NHT-financed homeownership in desirable locations.
This affordability pressure is reflected in the continued growth of informal settlement in and around major urban centres, as households that cannot access formal housing markets seek alternative solutions. Addressing this dynamic will require not just housing supply increases, but complementary investments in transport, utilities, and social services to make a broader range of locations viable for affordable residential development.
Looking Ahead to 2020
The outlook for Jamaica’s housing market as it enters 2020 is one of cautious confidence. The economy is in its strongest shape in a generation. The IMF programme graduation has removed a significant source of external oversight and uncertainty. Tourism is at record levels. The NHT delivery pipeline is robust. And the diaspora buyer market is engaged and active.
The key risk factors to monitor in the year ahead include: any deterioration in global economic conditions that could affect tourism earnings or remittances; the trajectory of construction costs and their impact on housing affordability; the evolution of the short-term rental sector and its effects on the long-term rental market; and any changes in the political or regulatory environment affecting housing delivery or financing.
On balance, the signals are positive. Jamaica enters 2020 with strong economic fundamentals, a resilient housing market, and a policy framework — centred on the NHT but extending to infrastructure, planning, and diaspora engagement — that is broadly supportive of continued housing market development. The structural deficit remains the defining challenge, and its resolution will require sustained political and institutional commitment over the medium term. Jamaica Homes will continue to track developments closely as the new decade begins.
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