Builders plead for roll-out of NHT projects

Avia Collinder, Business Writer

Raymond Cooper, president of the Incorporated Masterbuilders Association (IMAJ), is warning against shifting money away from new housing projects to fund repair of flood-ravaged public infrastructure, saying the reallocation would be bad for the construction sector.

It would also further delay housing starts that should have already fallen behind schedule, he said.

The National Housing Trust, now run by Annette Cecile Watson, has said it plans to spend some J$24 billion in the 2010/11 financial year to provide housing solutions and other benefits for its contributors.

The flood-repair bill estimated for road and other infrastructure was placed at just J$11 billion.

With no funds in the national budget for such emergencies, Government must tap alternative sources, and the IMAJ fears that ready sources of cash will be tapped and redirected.

"Our concern is that without re-arrangement of IMF restrictions, funds will be taken from the capital budget for repairs to public infrastructure, which will, in turn, affect the number of planned housing starts," Cooper told Wednesday Business.

The construction sector has been contracting in the recession and, so far, nothing has worked to jog it out of its malaise.

"I have seen no positive indication that there has been an increase in building starts resulting from lower interest rates and higher loan limits," said the IMAJ president.

He noted that while improved NHT terms might have, so far, led to increased applications, the impact had not yet been translated to the formal construction sector.

NHT's planned expenditure this fiscal year includes J$7.8 billion for 2,000 new homes.

In 2009, housing starts fell to 2,130 from 3,973 in 2008, according to Planning Institute of Jamaica data.

The NHT was responsible for 1,711 of last year's total housing starts, compared to the 2,368 solutions the Government agency started in 2008.

Housing solutions

The Housing Agency of Jamaica started 104 housing solutions in 2009 and none the year before, while private developers were responsible for only 315 solutions in 2009, compared with 1,005 in 2008.

The total number of houses completed in 2009 was 3,454 solutions, down 34.5 per cent, relative to the 5,273 completions recorded in 2008.

This reflected big declines in the number of completions by both the NHT and private developers. The Housing Agency of Jamaica did not complete any solutions during 2009.

While housing construction has nosedived, there has been a marked increase in applications to the NHT for housing benefits, but agency officials say it is too early to ascertain whether the spike is a direct result of recently lowered NHT mortgage rates and increased lending limits.

The jump in applications for residential purchases has been significant, rising by more than 100 per cent between January and August this year.

Real estate-industry officials believe improved NHT benefits, which kicked in between April and July, have served to boost public-housing interest and NHT applications.

President of the Realtor's Association of Jamaica and chief executive of La Maison Property Services Limited, Edwin Wint, said the medium-priced market has received a boost since the announcement of higher NHT loan ceilings per applicant and lower rates.

"We have seen an increase in the region of 20-25 per cent in effective demand in the J$5 million to J$10 million residential-market segment, which we attribute in part to this NHT initiative," said Wint.

This, he said, is despite actual sales data for January to June being unavailable.

Loan applications to the NHT have risen since May, a month after the new benefits were announced, peaking at 1,398 in August, reflecting a 130 per cent over January's figure, available data indicate.

The largest player in the residential market, the NHT's rates now range from one to seven per cent. The maximum available for individuals who qualify for loans from the Trust is J$4.5 million and J$9 million for joint applicants.

For serviced lots, applicants can borrow up to J$1.5 million.

Construction loans were also increased from J$2.3 million to J$3 million, while home-improvement loan limit climbed from $1.2 millionto $1.5 million.

Some measures took effect May 1, while other adjustments, which required detailed administrative changes, became effective July 1.

Industry experts say if the Government manages to deliver the promised housing starts and make loans available to developers, it could revive the market to near- 2008 levels.

austanny@yahoo. com

Some NHT projects

400 units at Perth, Manchester

400 units at New Longville Park, Clarendon

206 units at Twickenham Park, St Catherine

153 units at Creighton Hall, St Thomas

148 units at Providence, Montego Bay.

138 units at Hampden, Trelawny

Other units are planned for Cherry Gardens and Paddington Terrace in upper St Andrew, Orange Grove in St Catherine, and Bushy Park in Clarendon.