A Realtor’s Warning: Raising NHT Loan Limits Just Raises Prices to Match

• NHT loan limit increases get absorbed by higher prices
• Closing costs still run 10-12% of purchase price
• Starter homes are being marketed as Airbnb investments
• Cash-paying foreign buyers are crowding out mortgage buyers

While the market is stable, affordability has never felt more out of reach, Kingston realtor and homeowner Kadia Harris wrote in a Gleaner letter, describing what she sees daily across Kingston, St Andrew, St James and St Ann: starter homes no longer priced for first-time buyers, but marketed and sold like investment-income properties, built for Airbnb returns or rental yields rather than young families trying to get on the property ladder. Even traditionally affordable Portmore, she wrote, is climbing out of reach.

Harris’s sharpest point concerns a policy mechanism meant to help buyers that she argues quietly works against them. There’s a direct relationship between NHT loan limits and home prices, she wrote: as soon as limits go up, developers raise prices to match, meaning a higher NHT loan ceiling doesn’t necessarily buy a first-time buyer more house, it can simply reset what the market charges for the same house. Layered on top, closing costs still run 10 to 12 percent of the purchase price, alongside wages that have not kept pace, a combination she argues keeps many young professionals priced out regardless of loan ceiling adjustments.

Foreign direct investment compounds the pressure, in her account, tilting the market toward cash buyers able to close quickly and pay full price. That claim lines up with data realtors have cited for years: as far back as 2019, National Land Agency figures showed thousands of property transfers to Canadian, British, European and US-dollar buyers annually, and realtors along the north coast have separately estimated overseas buyers account for as much as 80 percent of acquired residences in some upscale developments.

Harris’s proposed fix is structural rather than another loan-ceiling adjustment: government needs to tackle land costs, development fees and access to lower mortgage rates directly, she argued, or young Jamaicans will continue watching home ownership drift further away, while the dream of a home becomes someone else’s investment portfolio instead.

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