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MARKET
RESEARCH AND ANALYSIS
Prepared for presentation to
Jamaica Mortgage Bank Housing Development seminar on Thursday
December 2, 2004—presented By Joseph Bailey—CASHFI
Housing Market Survey
Results
JMB Seminar
Joseph Bailey (CASHFI)
The
Study
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Designed to assess housing
demand in four parishes to arrive at broad estimates of
effective demand for all of Jamaica
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Questionnaire administered to
random sample of 2505 persons in 1265 households in
Kingston, St. Andrew, St Ann and Manchester
Basis of Selection
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Kingston the only parish
losing population
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St. Andrew’s population in
inter-censal years 1982-91 grew at rate identical to average
for country as a whole
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Growth in St Ann fell below
the average
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Manchester- Parish
experiencing rapid growth
Methodology
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Questionnaires administered
to a sample of households in randomly selected enumeration
districts
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Interviewees 18 years and
upwards
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Data on household composition
and expenditure gathered from heads of households only
Housing tenure 2001
Housing Plans
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44% of sample had no plans to
change housing situation
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Almost 56% of the sample were
in housing market
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In all areas the largest
segment intended to build/buy in short term
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Kingston and St Andrew showed
strongest desire to buy separate house, or home in scheme
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Highest demand from 30-39 age
group
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In Manchester the older age
group showed high demand for any option
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18-29 age group showed
preference for buying land to build
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Rural respondents more
interested in building own house
Reasons for no plans to change
housing situation
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Already owned home
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Lived with family
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Affordability problems
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can’t afford to borrow
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can’t get loan
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don’t want to borrow
Factors
influencing Demand
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Demographic changes
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Income flows
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Housing cost burden,
including tax, approval process and statutory requirements
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Growth in age group 30-39,
the prime home-buying group, to average 12-13% of population
Distribution of 30-39 Age Group
Housing
Market
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Approximately 56% of
population 18 years and over wished to change housing
situation
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Translates to roughly 469,738
persons islandwide
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A majority of those wishing
to build/buy must borrow to meet down payment
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Family assistance was a major
source of financing except in St Ann where 70% of
respondents used ‘own savings’
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Many declaring intention to
change housing status have no savings
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Geographical distribution of
age group across Jamaica would suggest that the parishes
with potential to create real demand for housing are
Kingston, St. Andrew, St Catherine, St James and St. Ann
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Amount Saved as down Payment
on House
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Amount Available For Mortgage
Servicing
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Age and Preferred Options (%
of Age Group)
Choice
of Parish for Buying a House
Issues for Consideration:
Mortgage Insurance (MI)
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There
are constraints on householders’ choice of tenure, affecting
means of loan repayment and initial down payment
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Lenders’ uncertainty about defaults limit access to credit
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MI
improves access to homeownership as it protects lenders from
defaults on high risk loans
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Broadens market for mortgage finance to greater numbers
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Buttresses financial stability
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Use of
this mechanism could be enhanced through risk-sharing
partnerships between public agencies and private
institutions as is the case in emerging markets
Housing
Microfinance (HMF)
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HMF is
increasingly an important ingredient in housing and
settlement strategy, enhancing effective demand
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HMF in
principle represents small ‘affordable’ credit at market
rate for short-terms
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Fits
need of low/moderate income housing solutions
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purchase of house lot
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home improvement and additions
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construction of small unit on property with legal status
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key
element in making low-income projects work
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