Country Profile

Source: Housing Agency of Jamaica Ltd. 2013

Jamaica has a population of 2.71 million people of whom 52% live in urban areas as of 2011. The total population and percent of population living in an urban environment have remained constant for the past 5 years.

In Jamaica 59.8% of homes are owner-occupied with a further 20.7% being rented from private landlords. Government or social landlords play a minor role. Recently a developers’ incentive program was established with the goal to increase social and affordable houses for lower-income Jamaicans.

Whereas in 2008 the amount was almost 454 million USD, in 2010 the total amount of mortgage loans outstanding at the end of year was only 288 million USD. This decrease was due to the current recession, which caused people to repay their loans and decreased new loan originations. The share of total mortgage loans as a percent of GDP fell from 3.3% to 2.1% in the same time period.

The dominant actor in providing home mortgage loans in Jamaica is the National Housing Trust which accounted for 82% of all mortgage loans by value in 2011. The National Housing Trust is funded by contributions taken from the salaries of everyone working in Jamaica. Employees pay 2% of their wages, self-employed people pay 3% of their assessed income and employers pay 3% of their total wage bill (NHT). In the most recent budget the NHT was granted a tax exemption from the General Consumption Tax as well as several other taxes so that it could expand its services to low income workers (Jamaican Information Service). This allowed the NHT to drop rates so that contributors who qualified for loans at 3% interest now repay at a 1% rate and those who qualified for a 5% interest rate will pay 3%. The goal of these policies is to benefit Jamaicans earning less than J$10,000 (about 115 USD) a week who make up about 55% of NHT contributors (Jamaican Information Service). Loans from the NHT can be combined with loans from the private sector in order to afford properties that would require a loan amount higher than the maximum NHT loan which, depending on the type of category, is in the order of J$4.5 million (about 50,000 USD) for a single applicant or J$9 million (about 100,000 USD) for co-applicants (NHT).

The private sector in Jamaica plays a minor role in the mortgage market given the importance of the NHT for the majority of the population. Private lending institutions, mostly building societies, serve the higher income groups (and foreigners) and provide supplemental loans to NHT loans for middle income households. The largest building society is the Jamaica National Building Society.