Housing demand expected to rise
Real estate investments in Jamaica are among the highest in the Caribbean, and are being driven by highway development and population increase, according to Petal James, the acting head of mortgage sales at JN Bank.
The investments are manifested in the commercial segment of the market, with the development of hotels and office space, but James notes that housing demand is also on the rise.
On the supply side, the Real Estate Board of Jamaica, REB, is reporting that developers are not only building more schemes, they are also constructing larger schemes.
In the 2015-16 fiscal period, while the total number of applications to REB increased marginally from 76 to 77, the number of lots covered in the applications increased from 2,146 to 3,502, while the housing units planned climbed from 1,045 to 3,187.
The REB noted in its annual report that St Catherine was by far the location with the biggest developments planned.
"While Kingston had the largest number of applications to register new schemes, St Catherine had the largest number of units and lots. St Catherine also had the greatest growth among parishes over two years," the REB said.
St Catherine accounted for proposals of 1,970 lots and 1,941 units at year ending March 2016. This compared to Kingston & St Andrew with 68 lots and 662 units.
In the prior year, the two parishes also topped the number of new development applications, with St Catherine submitting development plans for 1,198 lots and 305 units; while Kingston & St. Andrew featured 10 lots and 578 units.
St Ann and Manchester followed in number of housing solutions offered.
In general, rural developments offered more lots than units.
James said highway development and the improved network across Jamaica, such as the construction of Highway 2000 and the North-South Highway, are linked to the growth of housing and commercial developments and mounting intra-migration of Jamaicans from urban centres to rural communities.
Additionally, the Planning Institute of Jamaica is projecting that the Jamaican population will grow to 2.9 million by 2030, the mortgage specialist noted.
She is also attributing the increase in demand and supply to new National Housing Trust policies that offer improved financing options for mortgages.
"The NHT increased individual mortgage loan lending limits from $4.5 million to $5.5 million. This policy change has increased the potential for contributors to borrower more at a lower-rate tier, based on income earned, thereby reducing the capital injection for purchase of the property by the borrower," the mortgage manager said.
The state agency also increased loan limits for home improvement from $1.5 million to $2.5 million.
"Existing mortgagors who borrowed from the NHT 15 years ago or more can access these funds under the 'Fifteen Plus' offer for home improvement, repairs and expansion of the said property," James said.
Referencing the most recent Survey of Business and Consumer Confidence released this month by the Jamaica Chamber of Commerce, she said "the survey revealed that consumers' home-buying plans increased to 11 per cent during the third quarter, slightly ahead of the previous quarter's two-year low of eight per cent".
Housing data for the first fiscal quarter of this year, April to June, show 1,687 housing starts relative to 385 in the corresponding quarter of 2016. Housing starts by the NHT expanded by 77.7 per cent to 684 units in the period, while housing completions increased to 314 units from 290 units in the previous period.