Publication Date: January 3, 2020 | Coverage Period: December 3, 2019–January 2, 2020 | Category: Monthly Review
Month in Brief
- Jamaica closes 2019 as its strongest economic year in a generation: IMF graduation, record tourism, fiscal discipline.
- Residential property market ends year with solid transaction volumes; Christmas diaspora visit period active.
- NHT records one of its most active delivery years; 2020 pipeline robust across all fourteen parishes.
- Tourism earnings for 2019 expected to reach approximately US$3.6 billion — a new national record.
- BOJ rate environment stable; commercial mortgage market competitive on service rather than price.
- 2020 outlook: cautiously optimistic, with demand fundamentals intact and several policy developments anticipated.
2019 in Review: Jamaica’s Housing Market Year in Summary
Jamaica’s residential property market closes 2019 having delivered another year of price appreciation, active construction, and healthy transaction volumes — a performance that reflects the underlying strength of the economy and the resilience of structural housing demand. As this first edition of 2020 goes to press, the year just concluded can fairly be described as one of the most positive in recent Jamaica housing market history: not without challenges, but characterised by improving fundamentals across the board.
The year’s defining macro event was the confirmation of Jamaica’s graduation from its IMF Stand-By Arrangement in November 2019. After more than a decade of adjustment programmes and the fiscal discipline they demanded, Jamaica has demonstrated to international capital markets, development partners, and domestic investors alike that it can sustain the conditions for stable economic growth. The IMF’s assessment of Jamaica’s performance was unambiguously positive, and the country enters 2020 with its sovereign creditworthiness at its strongest since the debt crisis years.
For the housing market, 2019 also brought the Caribbean-wide shock of Hurricane Dorian’s catastrophic strike on the Bahamas in September. Jamaica itself was spared a direct hit, but the event prompted a necessary and overdue conversation about housing resilience, building code enforcement, and the vulnerability of informal settlements across the island. That conversation will need to continue into 2020 and beyond.
The December Property Market
The Christmas and New Year period maintained the market’s positive momentum. December is traditionally a month of mixed signals in the property market: the diaspora influx drives viewings and enquiries to peak levels, but formal transactions often complete on either side of the holiday period rather than during it. The pattern this year has been consistent with prior years: high interest and activity through the first three weeks of December, followed by a quieter period over Christmas week and the New Year.
Diaspora returnees — from the United Kingdom, United States, and Canada — were active across the market. Many diaspora visitors use the annual trip home to assess the condition of existing property holdings and to attend viewings of new developments. Real estate agents in Kingston, Mandeville, and Montego Bay all reported sustained interest from overseas Jamaicans, with several transactions expected to formalise in January and February once buyers return to their countries of residence and complete the remote transaction process.
New Kingston continued to attract attention as the premium apartment market. Several developments that broke ground in 2018 and early 2019 are approaching or reaching completion, adding new supply to a corridor where demand has consistently outstripped availability. The completion of these units will be watched closely by the market as an indicator of how quickly new supply is absorbed and at what price points.
2019 Economic Scorecard
The full-year economic statistics for 2019 are not yet available at the time of publication, but the direction of the key indicators is clear. GDP growth for the fiscal year is expected to be in the 1.5–2% range, consistent with the trend of moderate but steady expansion that has characterised Jamaica’s post-adjustment period. This is below the growth rates needed to make rapid inroads into poverty and unemployment, but it represents stability and a platform for acceleration.
Tourism has been the standout sector. Jamaica welcomed approximately 4.3 million visitors in 2019, comprising around 2.7 million stopover arrivals and 1.6 million cruise passengers. Tourism earnings are expected to reach approximately US$3.6 billion for the full year — a new national record and a testament to the investment in tourism product and marketing that has characterised the Holness government’s approach to the sector. This tourism performance has been a critical driver of foreign exchange earnings, employment, and ultimately housing demand in tourist-adjacent communities.
Remittance inflows for 2019 are expected to exceed US$2.5 billion — another record year. The strong US economy, which remained broadly robust through 2019 despite some mid-year uncertainty around trade policy and global growth, has supported Jamaican diaspora incomes and remittance capacity. These inflows continue to be a critical source of household income and savings that underpins housing demand at all levels of the market.
Inflation closed the year within the BOJ’s 4–6% target range. The exchange rate remained broadly stable in the J$133–137 range against the US dollar. Public debt fell further below 100% of GDP, on a declining trajectory that will remain a key fiscal metric in the post-programme period.
NHT: 2019 in Review
The National Housing Trust delivered one of its more active years in 2019, both in terms of units completed and in terms of the institutional infrastructure — Joint Ventures, Guaranteed Purchase Programme, scheme upgrading — put in place for future delivery. The upgrading of 49 existing NHT schemes at a cost of over J$2.5 billion improved living conditions for tens of thousands of existing beneficiary residents while also enhancing the value of NHT’s own portfolio.
Looking to 2020, the NHT’s pipeline spans multiple parishes and includes both Joint Venture projects nearing completion and new schemes in planning. The review of loan ceilings — which has been discussed throughout 2019 in the context of rising construction costs — is expected to be addressed formally in 2020. An upward revision of the ceiling would directly expand the purchasing power of NHT beneficiaries, though the risk of a parallel increase in market prices — a dynamic observed with previous ceiling increases — warrants careful management.
Housing Affordability in 2020
The structural affordability challenge that defines Jamaica’s housing market enters the new decade unresolved but no worse. The housing deficit remains at more than 100,000 units, concentrated in the affordable segment. Commercial mortgage rates at 8–9% continue to place market-rate homeownership out of reach for the majority of working Jamaicans. The NHT remains the critical pathway for the majority of first-time buyers.
One area where 2020 may bring progress is in the continued development of the secondary mortgage market. The creation of mechanisms that allow mortgage originators to securitise their loan books would bring additional liquidity to the mortgage market and, over time, could support a modest reduction in commercial mortgage rates. This is a medium-term structural development rather than an immediate affordability solution, but it is a direction worth tracking.
Investment and Diaspora Outlook for 2020
Investment sentiment toward Jamaican real estate is broadly positive as 2020 begins. The combination of IMF graduation, record tourism, falling debt, and a stable exchange rate presents an attractive macro backdrop for both domestic and diaspora investors. JN Bank, VM Group, and NCB are all expected to maintain their active mortgage market presence, with diaspora-targeted products remaining a competitive priority.
The short-term rental market — driven by Airbnb and similar platforms — is expected to continue its expansion, with regulatory developments a key variable to watch. Whether the government moves to formalise the sector through a bespoke licensing and tax framework in 2020 will significantly affect the economics of short-term rental investment and, by extension, the supply of long-term residential rental accommodation.
Looking Ahead: Cautious Optimism for 2020
Jamaica enters 2020 with the strongest economic fundamentals it has had in a generation. The housing market reflects this: prices are rising, construction is active, and the institutional architecture for housing delivery is functioning. The challenges that remain — the structural deficit, affordability gaps, building code enforcement, and the short-term rental regulatory vacuum — are real and require sustained attention.
The global backdrop warrants monitoring. The US-China trade tension, which has introduced uncertainty into global supply chains and investment flows through 2019, continues to be a risk factor even as the two parties appear to be moving toward a phase one trade deal. Any deterioration in global growth would affect Jamaica through reduced tourism and remittance flows. There are also early reports of an unusual cluster of respiratory illness in Wuhan, China, that health authorities are investigating; the nature and implications of this development are not yet clear, and it warrants watching as global health surveillance continues.
On balance, the outlook is one of cautious optimism. Jamaica’s housing market has demonstrated resilience through the active hurricane season and the Dorian shock. Its economic fundamentals are sound. Its institutional housing delivery architecture, centred on the NHT, is functioning. And its diaspora and investment demand base is engaged. The new decade begins on firm ground.
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