Economists with the Jamaica Productivity Centre (JPC) on Monday said Jamaicans will eventually shift from a culture of homeownership to a culture of renting given the trajectory of real estate prices.
The JPC team shared for their belief that such a culture shift is taking place at a workshop held at the Jamaica Employers’ Federation (JEF) offices in Kingston.
Economist Wendel Ivy said “Consider that the average person earns approximately J$150,000 per month. With mortgage repayment of J$130,000 monthly on a J$21 million property, the math just does not add up. Therefore, persons must rent. And we don’t think that this is a bad thing. What we say is that because so many luxury apartments are coming on board, you may find it better to simply rent a lovely apartment and live the life without making such a huge salary sacrifice.”
“Jamaicans believe strongly in owning their own property. They believe deeply and that is why there are challenges when people see new developments at prices they cannot afford.”– Economist at the Jamaica Productivity Centre, Wendel Ivy
Ivy explained that the wide selection of new developments meant that renters had more options to select from but acknowledged that it would require a culture shift. “Jamaicans believe strongly in owning their own property. They believe deeply and that is why there are challenges when people see new developments at prices they cannot afford. However, I believe in the long run we will see this as a good thing because people will have a higher standard of living without the input costs of ownership, just like they do in other Caribbean countries.”
What’s more, Jamaica is in line to follow Barbados where there are better housing choices for renters, Ivy said. According to Global Property Guide (GPG), “Barbados has a thriving rental market, due to the large number of tourists. Renting is more attractive for most people than getting a loan to buy, due to high mortgage interest rates.”
GPG also noted that, Rent varies greatly based on several factors including location, the type of property, whether it is furnished or not and the time of year.
The least expensive long-rentals can be found on the East Coast, while prices are increasing in the South Coast. The most expensive properties are generally on the West Coast.
In Jamaica, GPG reports that, “Prices of apartments and houses have continued stable in Kingston and St Andrew during 2010.” Speaking to realtor John Issa, the GPG quoted him as saying, “Demand for homes costing J$25 million (US$185,600) and below showed strong growth in recent years, while houses worth above J$40 million (US$297,000) had the least growth. There was an increase in demand for townhouses, apartments, and for properties in gated communities. I predicted 2019 will be a very strong year for real estate as demand continues to be driven by stable, strengthening economy with low mortgage rates. Jamaica has been back on the international list as a country in which to invest from early 2018,” said Issa. “While crime did slow the momentum, it appears that Jamaica’s economic indicators are within the parameters for foreign investors.”