PROVEN Path to Wealth: The Jamaican Real Estate Market

15 February 2023

PROVEN Path to Wealth: The Jamaican Real Estate Market

“Real estate investing, even on a very small scale, remains a tried-and-true means of building an individual’s cash flow and wealth.”

-Robert Kiyosaki. 

We’ve heard it all before, from the wealthiest entrepreneurs, industrialists, business moguls, investors, and economists – a sure way to secure wealth and financial stability is by owning a piece of real estate. Here are four reasons why real estate investing in Jamaica is a sure path to wealth generation:

1. Real Estate Provides a More Secure and Competitive Return on Investment

With savings providing less than 1% return per annum, and low yields being offered by other financial instruments, real estate investing provides a more secure and higher return on investment. Average rental yields in Jamaica typically start at 6% and can easily surpass that, in addition to the continuous appreciation of housing values in Jamaica. While the demand for real estate continues to grow, developers have earnestly tried to meet these needs, despite it being at a slower rate, due to the intrinsic characteristics of land and real estate. As inflation eats away at savings and income, in the Jamaican context, investors look to assets that will preserve the value of their money. One such asset is real estate, as property prices tend to move up along with other prices.

2. Resilient Real Estate Market

There’s no doubt concerning the resilience of the Jamaican real estate market. The real estate market has remained one of the most stable sectors despite the recent tumultuous COVID-19 pandemic. During the onset period of the COVID-19 pandemic (April – June 2020), the Jamaican Services Industry declined by a whopping 20.6% with Real Estate, Renting & Business Activities declining at one of the slowest rates, second to Producers of Government Services. While in the Jamaican Goods Producing Industry, the Construction sector remained the highest growing sector throughout the lifetime of the pandemic. 

3. Robust Rental Market

The millions of tourist arrivals and the influx of ex-pats aid in sustaining the substantial demand for Jamaican real estate. Jamaica is a renowned tourist destination and according to the 2019 Travelers Choice Awards, Jamaica was listed as one of the top 25 destinations in the world. Many of these guests want to expand their horizons and rent locals’ properties rather than being cooped up in a hotel room and the returns show! Airbnb bookings increased by 55% in 2021, from 193 million in 2020 to 300 million in 2021, with Kingston hosts earning US$2.4 Million from Airbnb services in 2017 alone. It’s no wonder short-term rentals are the main go-to for real estate investors these days. And with tourism levels now surpassing pre-pandemic levels, real estate investors are sure to realize an increase in their bookings. According to the Minister of Tourism, Edmund Bartlett, the Jamaican Tourist Sector is on track for record arrivals for the month of October 2022, surpassing pre-pandemic levels. Preliminary figures released by the Jamaica Tourist Board for the first few weeks of October show stopover visitor arrivals of 123,514. This topped figures for the same period in 2019 by some 10,026.

4. Ever heard of a home equity loan?

Numerous local financial institutions offer a unique type of loan, known as a home equity loan. A home equity loan allows homeowners to borrow against the equity in their homes. The loan amount is based on the difference between the home’s current market value and the homeowner’s mortgage balance due. With this loan, you can do virtually anything, such as: starting a business, pursuing further education, and even using it to finance a downpayment on a second home. Not only can you benefit from higher resale values and competitive rental rates in the local real estate market, but you can achieve personal and financial goals and pave your path to wealth by leveraging your home equity!

Billionaire Andrew Carnegie famously said that 90% of millionaires got their wealth by investing in real estate. With these benefits of the real estate market, it’s easy to see why, and the Jamaican market is no different. Consider bolstering your portfolio with a mix of real estate investments and pave your proven path to wealth.

Contributed by:
Tianna Porter
Marketing and Sales Officer