Jamaicans giving up on buying homes

QUOTING THE Jamaica Conference Board Survey, Courtney Campbell, president of Victoria Mutual Building Society, has indicated that many Jamaicans are not hopeful about purchasing a home, noting that in the third quarter of 2017, the number of persons expressing a wish to purchase a home declined to less than 10 per cent.

He added that, as a result, the country’s mortgage disbursements, as a percentage of gross domestic product (GDP), lagged behind others in the Caribbean and Latin America, which have low levels of penetration when compared to the rest of the world. Mortgage disbursements, as a percentage of GDP in Jamaica, is two per cent, compared to Barbados, which has a per mortgage disbursement GDP of 39 per cent and The Bahamas with 35 per cent.

The problem seems most troubling among the country’s prime working age group of adults 25 years old to 35 years old, he said, who, compared to their counterparts in developed countries, don’t own a home in the short term after completing tertiary education. In developed countries, many young people purchase their homes three years after completing tertiary education, he said.

According to the Statistical Institute of Jamaica, unemployment is 13.3 per cent among that age group.

“People need a consistent, legitimate income stream to be able to afford even the minimal cost for housing, and that, therefore, means they must be employed to improve their chances of accessing financing,” said Carlton Earl Samuels, assistant general manager at the JN Group.

HOUSING DEMAND

“Consequently, to address the housing needs of the population, we must address the demand side of the equation so that the supply side can respond. In other words, we must address the employment concerns, as income determines the shelter that one can afford,” he affirmed.

However, Campbell also said poor individual savings for investments, such as housing is also a problem, and he pointed to the various costs involved in a house purchase, which includes stamp duties, deposit and closing costs, as well as legal fees.

“Our savings rate in Jamaica is comparatively low, when you look at other territories in this region, such as Trinidad and Tobago,” he said.

“We need to encourage our people to start saving, so that by the time they are ready to make that first home purchase, most, if they were diligently saving, would have built up that five or 10 per cent required to [purchase] that first property.”

He maintained that it was important to get young people, in particular, to start saving for life goals.