Experts in the real estate sector agree that homeownership is probably one of the most powerful drivers of wealth creation in the Jamaican economy.
Carlton Earl Samuels, chief development financing officer at The Jamaica National Group (JN), said owning a home is a safe investment, pointing out that homeownership offers long-term financial security for most persons and can transform the economic prospects of a family, both day to day, and generation to generation.
Samuels explained that unlike buying a motor car, which depreciates from the day it is driven out from the dealer’s garage, real estate generally appreciates in value from the date of its acquisition.
“Therefore, while a motor car and other consumables tend to lose value, real estate generally increases in value, as long as there is no degradation in the area in which the property is located and it is generally maintained,” he advised.
“For example, a property which was purchased in 2012 for J$15 million is now worth $28 million. That means, in seven years, your investment has almost doubled,” he stated. “If nothing else, it’s a fairly reliable long-term investment.”
Howard Johnson Jr, chief executive officer of Howard Johnson Realty and immediate past president of the Realtors Association of Jamaica (RAJ), agrees, noting that for years, home prices in Jamaica have appreciated annually, at average rates from about eight to 20 per cent.
“This is based on a combination of factors, from how early you buy into a development to how well the area has appreciated because of infrastructure development,” he explained. “Therefore, I’ve seen persons buy into a typical community, there’s no significant change in terms of development, but based on what they could get for rental, they are now earning eight to 10 per cent interest on their money per annum,” he said.
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