THE ANALYSTS: Jamaicans abroad driving local house prices up

THE ANALYSTS: Jamaicans abroad driving local house prices up

Financial blogger, Gillan Jackson says the higher mortgage rates climb in countries such as Canada and the United States, the more competitive Jamaica’s housing market will become as people flock to the island to purchase properties.

Speaking on Taking Stock with Kalilah Reynolds, Jackson noted that mortgage rates in the US jumped by over 50 basis points to a 14 year high this week.

As of June 16, US mortgage rates averaged 5.78 percent, up from 5.23 percent the previous week.

It is the single largest increase in mortgage rates that the US has seen.

According to Jackson, the mortgage rate increase can be linked to the US Federal Reserve, which is the country’s Central Bank, announcing that it will be raising its benchmark lending rates.

“The benchmark lending rates that the Central Banks has, has jumped to 1.5 percent at the lower limit and 1.75 percent at the upper limit. This is the largest increase in the Fed rates and that is what triggered the reaction in the mortgage rate market,” she explained.

Jackson also noted that the demand for housing in the US has skyrocketed in the past few years, with the National Association of Realtors saying that there is a shortfall of about 6.8 million housing units.

“So the demand for housing especially in the mid-income areas is extremely high and housing prices are going up because the demand is going up,” she said.

She further explained that when housing becomes unaffordable or unattainable in overseas markets, the Diaspora tends to look to Jamaica to purchase housing.

“When houses are being listed in US or Canadian dollars, it seems like a lot to us, but when you’re earning US or Canadian dollars, it might not seem like that much. A US$200,000 [house] might be impossible to find in the US and easy to find in Jamaica,” she said.

She said that this increased interest will drove local housing prices higher.

“So people who come back to buy property in Jamaica, they are ones that are causing prices out here to go up because they have the cash to be available to afford these US dollar priced houses,” she explained.

Jackson noted that some individuals purchase houses as investment properties or as second homes for vacation or retirement.

Despite the competitive market, Jackson said the local potential homeowner should not be discouraged from looking for housing if they are interested.

“I think buying a house is an awesome thing so you should continue looking into it if you’re in the market for it,” she said.

“If you’re in the market for a house and you can buy a house, I would say buy the house because rates will fluctuate, right now they may be going up but I have personally benefited from a rate decrease when mortgage rates went down,” she added.

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Sashell Williams2024-09-03T21:40:31-05:00