Business
Housing market in Jamaica recovers
The ratio of mortgages to GDP rose to 4 percent in 2007, and then slid back to around 2 percent of GDP in 2009 and 2010.
The Sluggish Growth is Attributed to:
* Jamaican real estate market’s dependence on foreign and expat home buyers, who usually pay cash
* High mortgage interest rates, forcing foreigners to obtain financing in their home countries.
The maximum loan-to-value (LTV) ratio for foreigners is about 70 percent of the appraised value of the property, with a term period of 20 years. A government-owned company, the National Housing Trust, leads the mortgage market with around 63.7 percent market share. It is followed by building societies owning 36.1 percent of the market.
The government recently hinted at a plan to amend the Mortgage Insurance Act (MIA) to make home buying easier for average Jamaicans. The amendment, as advised by the Jamaica Mortgage Bank (JMB), would raise the percentage of the allowed value for financing to 97 percent, from 90 percent.
According to Minister Morais Guy of the Ministry of Transport, Works and Housing, the proposed amendment could make home mortgages more accessible and reduce costs to a sum of around 5 percent.
