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Guy: NHT could be triggering higher house prices

Published:Wednesday | June 12, 2019 | 12:24 AMRomario Scott/Gleaner Writer
Dr Morais Guy, opposition spokesman on housing.
Dr Morais Guy, opposition spokesman on housing.

Opposition Spokesman on Housing Dr Morais Guy has suggested that there is a correlation between raising the ceiling on funds potential homeowners are able to access from the National Housing Trust (NHT) and skyrocketing market prices, making it harder for many Jamaicans to turn their own keys.

During his Sectoral Debate presentation in the House of Representatives yesterday, Guy said it appears to be a practice where “each time the NHT increases the maximum beneficiary amounts, the price of a standard two-bedroom house increases.

“When the ceiling was $4.5 million per contributor, with a couple getting $9 million, the value of the said unit was around $10 million. When it went to 5.5 million, that reference unit went to $12 million, $13 million.

“Now we see the benefits going to $6.5 million, and those same type of houses are reaching $14 million to $16 million,” Guy said.

These price movements, he said, were hurting those who were in search of a house.

Guy questioned whether the NHT was guilty of triggering increased market rates.

“It begs the question as to whether the developers are jacking up the prices based on the NHT setting the tone,” he said.

He called for the NHT to commission a study to determine whether it was culpable in causing housing price to increase, mentioning that economists often argue that pricing is determined by demand and supply.

“We need to know which is the chicken and which is the egg,” Guy said, as his colleagues cheered.

In March, Prime Minister Andrew Holness announced that the NHT loan limit would be increased from $5.5 million to $6.5 million, “consistent with the estimated changes in construction cost per square foot since the last adjustment”.

Guy, the St Mary Central member of parliament, also knocked the Holness-led Government for failing to have a debate on the strategic review of the NHT and to deliver a housing policy, the draft of which was left by the previous administration.

He said while he expected that the Government might want to make changes to the policy, “it cannot be that the changes are so monumental that it has taken upwards of two years to achieve these amendments”.

Holness was not in Parliament yesterday when Guy was making the presentation, and Pearnel Charles Jr, minister with responsibility for housing, sits in the Senate.