Wednesday, December 3, 2008

Jamaican Real Estate in Trouble

Well another blow has been delivered to the housing markets with reports of climbing interest rates. Amusingly, this comes one day after an article in AXIAFX waxing about the phenomenal returns on investments in the Jamaican real estate market. It will be interesting to watch whether these so called high returns will be able to be sustained.

The fact of the matter is that the real estate market has been in decline for sometime and this should come as no surprise as the Jamaican economy is not immune to the shocks being felt in the United States and elsewhere. To compound the matter is the fall out encountered at the hands of those unscrupulous captains of the alternative investment schemes who exploited vulnerable and in some cases greedy participants. Now we have banks and mortgage institutions increasing interest rates under pressure from the Bank of Jamaica. This is supposedly an attempt to curtail the free fall of the Jamaican dollar relative to the US. It will however definitely impact negatively on local businesses on a whole and the real estate market is no exception as pointed out recently in the Jamaica Observer. For what this means is the cost of money will go up in circumstances where not much money is floating around anyway. It is no wonder that small business owners protested today about the hike in interest rates. They and we are staring at serious financial crisis a fact supported by the looming lay-offs and redundancies expected in some industries.

If this high interest rate policy is allowed to continue it is my humble opinion that the real estate market will not be able to yield the "phenomenal" returns referred to above. It will instead lead to more non-performing mortgage loans, more foreclosures, less purchases; in other words a general slow down if not collapse of the market. Fortunately these things are cyclical and the market will rebound. The question is when.


Anonymous said...

hello, AP Lawyers, the comprehensive reference of useful Law related information, articles. Find the best lawyers, attorneys and law firms in the US. Find the best Injury Lawyer, Divorce Lawyer, Criminal Lawyer, Accident Lawyer, Mesothelioma Lawyer, Medical Malpractice, Debt Consolidation, Nonprofit and other attorneys.
Visit at

Anonymous said...

congratulations! this blog is very interesting and has information most important we invite you to visit our blog and and you will find both. Prices will amaze you Great investment opportunity at Costa Rica Pacific Coast, costarica real estate ,

retirement in costa rica, costa rica condominiums. Visit us for more info at:

faisal said...


How is it possible?

Pakistani Real Estate.

Mari said...

What a great web log. I spend hours on the net reading blogs, about tons of various subjects. I have to first of all give praise to whoever created your theme and second of all to you for writing what i can only describe as an fabulous article. I honestly believe there is a skill to writing articles that only very few posses and honestly you got it. The combining of demonstrative and upper-class content is by all odds super rare with the astronomic amount of blogs on the cyberspace.
I have bookmarked, Dugg, and I joined the RSS subscription. Thanks! ….
Dominican Republic Real Estate

Evolve said...

i truthfully enjoy your own writing kind, very remarkable,
don’t give up as well as keep writing due to the fact that it simply just worth to follow it. looking forward to see a whole lot more of your current well written articles, enjoy your day
London Chartered Accountants

CCC said...

interesting commentary on the real estate laws. Strong, clear private property protections are the underpinnings to, and key to, a thriving free market.

fix credit houston