Growth & Jobs | Diaspora encouraged to invest in Jamaican real estate market

AHEAD OF the upcoming 10th Biennial Jamaica Diaspora Conference, two seasoned professionals in the real estate sector are encouraging Jamaicans living abroad to invest in the local real estate sector.

Newton Johnson, president of the Realtors Association of Jamaica (RAJ), and Petal Hall, group sales executive at The Jamaica National Group and realtor associate with JN Properties Limited, say despite the fairly recent uptick in mortgage rates in Jamaica, it’s a great time to purchase property in Jamaica.

Johnson outlined four factors which he says favours those abroad who want to invest in a Jamaican property.

RETURN ON INVESTMENT

He noted that buying property in Jamaica for investment purposes can be very lucrative, as the Jamaican real estate market generally offers great returns relative to the cost of the investment.

“Buying a property in Jamaica is one of the best and safest investments that you will ever make in your life. If you look at the Vineyards at Deanery, the initial price was about $24 million, and they are now almost $34 million. You’re looking at a capital appreciation of about 15 per cent. Which other investment is going to afford you that level of return on your money?” he underscored. Capital appreciation refers to an increase in price or value of assets or investments over time.

JAMAICA IS STABLE

Pointing out that Jamaica enjoys a stable political and economic landscape, Johnson said that means investors are in a good position to predict returns. Wars, he said, usually lead to a decline in economic growth, and this reduces demand in the real estate market and investment returns.

“The political stability of a country speaks volumes, as people are going to want to invest in a country that is relatively stable, and Jamaica is one of those countries,” he stated.

Building on the previous point, Johnson also noted that Jamaica’s inflation rate is stable. According to the Bank of Jamaica, “low, stable and predictable inflation will facilitate sustainable productivity, economic growth and a reduction in the public debt burden”.

COMPETITIVE PRICES

“Our real estate prices are below those of other islands in our territory. Based on all those four factors, it’s a good time to buy now. It’s always a good time to buy, and it is one of the safest investments you can ever make,” he continued.

Johnson revealed that the Jamaican real estate market offers diverse property types and caters to the wants and needs of various buyers.

“Every parish in Jamaica has a different offering, based on what you are looking for. If you’re looking for a retirement home, somewhere where you can relax, you can go to Portland or St Mary. If you want to be in the limelight or the thick of things, you go to Kingston or Montego Bay, so every parish has something to offer you as an individual,” he opined.

He added that short-term rental via platforms such as Airbnb, an online marketplace where people rent out their homes to people looking for accommodations in specific locations, is currently thriving in Jamaica.

“Airbnb is king now and a lot of people have formalised their operations. And, based on that, they have been able to use the equity from their first home to get a mortgage to buy a second or third home. A lot of people find value in vacationing in these Airbnbs, as opposed to hotels,” he pointed out.

Minister of Tourism Edmund Bartlett revealed that 31 per cent of visitors to Jamaica in 2023 used the sharing economy, or Airbnb.

Hall also underscored the lucrativeness of the short-term rental market.

“Four years ago, there was a slowing down of the Airbnb market with COVID-19. What we have found, now that the economy has opened up, is that there is a flood of previous Airbnb owners who are now active again, and new owners. Travellers are coming in, and so they are looking at low-cost accommodation outside of the traditional hotels. Both short-term and long-term rentals are going up,” she said, although opining that bookings are seasonal.

Investing in real estate takes preparation, Hall said. She noted that although they may not be residing in Jamaica, Jamaicans overseas can access mortgages from local financial institutions to purchase property in the country. She outlined the steps that they should take to obtain a mortgage in Jamaica.

SAVE

Hall said obtaining a mortgage will involve making some upfront payments, such as a deposit, lawyer’s fee, valuation fee, and so on. Therefore, a prospective buyer must save at least 25 per cent of the total cost of the property to cover these expenses.

GET PRE-APPROVED

“You must be pre-approved by an organisation which provides mortgages. In order to become pre-approved, you must provide your income information to the prospective mortgagee. You also must provide your credit report from overseas, and locally, and get a Tax Registration Number (TRN). Anyone buying property in Jamaica must have a TRN,” she said.

She noted that getting a TRN is not a difficult process for Jamaicans overseas. They can log on to the Tax Administration Jamaica website to apply.

PROPERTY SEARCH

Once an interested buyer is pre-approved, Hall said they can begin their search for a property that they can afford through a licensed realtor.

“At JN, through JN Properties, we can support you with that search, or you can seek the services of any licensed realtor. We can also put you on to property developers to help you with your search. “We also have a realtor-affiliate programme with JN Bank and the RAJ, so you can have a wider range of options to choose from,” she said.

More information and discussion on the sector will take place at the Biennial Jamaica Diaspora Conference, which will be held from June 16 to 19 at the Montego Bay Convention Centre in St James.

To register for the conference, persons should visit https://diasporaconferenceja.eventbrite.com.