NHT's uptown ambitions irk developers
Recently-announced plans by the Government-run National Housing Trust to enter the high-end market in swanky Cherry Gardens, is not going down well with the Jamaica Developers' Association, the umbrella group of property developers.
Association president Reynold Scott said the group has requested a meeting with the NHT to discuss the concern, which appears to centre on fears of unfair price competition.
"We are very concerned about the implications on all sides," Scott told Wednesday Business.
The project include the construction of six three-bedroom town houses at Mark Way in Cherry Gardens, due to be contracted for J$141.7 million to Prime Develop-ment Company Limited. The recommendation will need to go before Cabinet for final approval.
The Cherry Gardens project is not NHT's first foray beyond the middle to low income market which has been its comfort zone.
Its move upmarket includes five three-bedroom houses at Sharrow Drive, five three-bedroom town houses at Paddington Terrace and nine houses at Salisbury Avenue in the upper-middle income brackets.
The high-end projects are valued by construction cost at about J$700 million.
NHT is a J$132 billion operation,whose investment in housingthis year is expected to top J$24 billion.
The NHT said construction was in progress at Paddington Terrace and should be completed next month.
The Mark Way development is expected to begin in September and delivered in September next year. The
Sharrow Drive will begin March 2011 for the houses to be ready a year later. Those at Salisbury should hit the market next January.
"We would need to know whether these units would be sold at market price," Reynolds said.
But the NHT has indicated in an e-mail response that prices have not yet been set for the units.
"The selling price of the units will be based on the market conditions at the time of their completion," the Trust's response read.
Reynolds is of the view that developers in this market would be at a disadvantage as they have to access property development loans at high interest rates which would make them unable to compete in price with the houses built by Govern-ment's cheap funds. Reynolds also wants to know how the NHT plans to fundthese Projects.
The Trust has replied that the ventures were being done jointly with the Commissioner of Lands and Ministry of Water and Housing. The lands are owned by the Commissioner of Lands.
Upper middle-income market
But not all developers seem to be as perturbed as Reynolds. Sylvester Tulloch, the managing director of Kemtek Development and Construction Limited said the NHT's entry into the upper middle-income market could be a good thing.
"It is a good thing because they are diversifying their portfolio and they are meeting the needs of their contributors," Tulloch said.
"I think the NHT realises that you have people from different income groups who are contributors to the Trust and as such, they are willing to satisfy that target market."
Realtors, too, are welcoming the Government's initiative. President of the Realtors Association of Jamaica, Edwin Wint said he had no problem with the NHT entering that market to provide healthy competition.
"If they are going to use their dominant position to access low interest rate funds to distort the market, then we have a problem, but if they are going to provide healthy competition, then we have no problem there," Wint said.
The NHT is better known as an agency providing housing to persons at the lower spectrum of the market, but says its service is not confined to any one grouping.
"The NHT's purpose is to facilitate home ownership for all its contributors," the Trust said in its response.
"Whereas the Trust makes every effort to particularly facilitate home ownership for low-income earners, its policy also recognises the needs of all income groups."