Recession hits NHT - Loan house set to lose millions

The harsh economic climate over the last year could cost the National Housing Trust (NHT) more than $1.2 billion this fiscal year.  A breakdown of this figure shows that interest on investment is expected to decline by $671 million from last year, while employee contribution is projected to be $559 million less than last year.

However, head of corporate communications at the NHT, Hortense Rose, made it clear that this would not significantly affect the company's performance this year.

"The trust is adequately capitalised to deal with such occurrences," Rose said in an emailed response to questions from The Gleaner.

The massive layoffs across several sectors last year were cited as one of the reasons for the decline in contributions.

"Our projections assumed that workers made redundant last year may still be out of jobs this year," said Rose.

The NHT's senior general manager for construction and development, Donald Moore, acknowledged that there could be salary increases in the private sector this year, but said this would not be enough to offset the shortfall.

The reduction in interest rates under the Jamaica Debt Exchange was cited as one of the factors for the projected $671-million decline in investment interest.

"NHT's investments in certain instruments are, therefore, being affected," Rose conceded.

Another factor, the NHT's communications head said, was a strategic decision by the company to reduce its investment portfolio by $3.2 billion this fiscal year.

"Last year, the NHT had taken a strategic decision to increase its expenditure on housing in the 2010-2011 fiscal year. One result of this is that our funds for investment purposes would have been reduced," she explained.

Last week, Moore told the Public Administration and Appropriations Committee of Parliament that the NHT planned to spend $24 billion on housing expenditure this fiscal year, up from the $16.9 billion spent last year.