The National Housing Trust (NHT) in Jamaica recorded a surplus of $18.9 billion as laid out in its annual report and financial statements for the period 2019/2020.
However, the result is reduced by 20.3 per cent from $23.7 billion in 2018/2019, stated directors. Total operating income decreased 3.8 per cent to $35.0 billion from $36.4 billion in 2018/19.
Additionally, the Trust reported that non-refundable employers’ contributions, which is 61.4 per cent of the total income, increased marginally by 1.0 per cent. Interest revenue accounted for 32.6 per cent of total income and declined by 9.6 per cent, amounting to $11.4 billion.
Meanwhile, interest on mortgage loans totalled $10.4 billion, down from $11.4 billion for 2018/19, a result of the one per cent reduction in mortgage interest rates effective April 2019.
The Trust said interest on investments also fell by 22.1 per cent due to the combination of declining interest rates and the reduction of investable funds resulting from increased construction activities.
Expenditure for the year amounted to $16.1 billion up from $12.1 billion in 2018/2019. Operating expenses, which accounted for 57.5 per cent of the total, increased by $759.2M or 8.9 per cent over the previous year.
Employee costs accounted for 75.3 per cent of operating expenses.
The Trust reported that it spent $22.9 billion in loan repayments, $476M more than budgeted, but $104 million less than the previous year.
The reduction in interest rates of one per cent on all loans led to the decline in sums collected. Lower than budgeted collections for the combined mortgage portfolio, institutional loans and the Joint Finance Mortgage Portfolio were offset by the higher than anticipated repayments of main mortgage loans.
The NHT said that a total of 8,600 loans were granted to contributors between April 2019 and March 2020, 5.7 per cent more than planned and 1.1 per cent more than last year.
Management indicated that, as is customary, main mortgage loans account for the majority (84.3 per cent) of the loans granted for the year – 7,254 with a value of approximately $23.2 billion.
The total value of the loans written during the year was $30.3 billion. Contributions collected surpassed its 2019/2020 target by 6.2 per cent or $2.4B amounting to $38.4 billion.
Management said the amount represents a 2.7 per cent or $1.0 billion increase over the sums collected the previous year.
The surplus can be attributed to growth in the Tourism and BPO sectors (before COVID-19) and improved contribution compliance efforts.
The Trust ended the financial year with total assets valued at $309.9 billion. Loan receivables totalled $256.9 billion and accounted for 82.9 per cent of total assets.
This represents an increase of 7.4 per cent over the prior year’s balance. Receivables and prepayments totalled $6.1 billion, an increase of 39.1 per cent over 2018/2019.
Management stated that as the Trust shifted its strategy from investing in the financial markets to investing in housing, investment securities, short-term deposits and resale agreements and cash and cash equivalents declined by 45.5 per cent, 56.5 per cent and 51.9 per cent, respectively.
Conversely, the increased presence of NHT in the housing market led to a growth of 51.7 per cent in inventories amounting to $25.5 billion.
The value of housing under construction grew by 68.5% per cent, moving from $10.7 billion to $18.1 billion. The value of housing units completed but not yet sold, increased almost threefold to $1.3 billion up from $497 million last year.
Since its inception in 1944, the National Housing Trust has completed 107,867 housing solutions for its contributors. At the end of the 2019/2020 fiscal year, the Trust recorded 18,929 housing starts.