Ayanna Kirton, Gleaner Writer
THERE HAS been a positive trend in the number of applications for mortgages from most local building societies so far this year.
Frank Harrison, Victoria Mutual Building Society's senior vice president of operations said the response of homebuyer's has been strongest this year when compared to recent years.
Harrison attributes the trend to growing confidence in the real estate market and new affordable housing developments outside of the Corpo-rate Area in St. James and St. Catherine. Harrison said that the company's competitive interest rates of 13.95 per cent for first time homebuyers also attracted many applicants.
However, senior mortgage manager for Jamaica National Business Society, (JNBS) Wanika Purkiss, said while there was an increase in the number of housing schemes outside of Kingston in the $2 -$2.6 million price range, the number of units available in the Corporate Area for the mid to upper income buyer was very small.
The mortgage manager said there was a gap in the availability of $3.5 to $6 million houses and buyers were having difficulty finding property within that price range. Purkiss said devaluation of the Jamaican dollar against its US counterpart earlier this year affected the availability of these homes. Sellers were taking a wait-and-see approach, opting to hold off on listing their properties until the economic situation stabilised.
Purkiss said the earlier months of the year were not representative of the typical house-hunting period and mortgage applications were expected to increase by year-end, when persons usually buy houses.
JNBS usually finances 95 per cent of the cost of the home for the first time home buyers provided he or she is within the income bracket that would enable them to service the loan.
ATTRACTIVE INTEREST RATE
The building society's 14 per cent interest rate has proven attractive to Jamaicans living abroad. "Quite a few foreign residents have had an interest in investing in local property particularly those in the 35-40 age group," said Purkiss. Jamaica National Business Society has disbursed 818 loans valued at 1.4 billion so far this year.
Bank of Nova Scotia Building Society's manager of mortgage services, Philip Williams said the building society's recent 'Grad Plan' promotion had impacted the number of mortgage applications there. According to Williams, mortgages approved in 2003 by the Bank of Nova Scotia Building Society have almost doubled this year, up from approximately $264 million last year for the six-month period of January to June to $431 million this year from January to June. Williams said this dramatic increase was due to the 10.875 per cent interest rate given to qualified applicants of the advertising campaign which targeted university graduates under the age of 35 with two to three years of work experience.
According to the Planning Institute of Jamaica's Economic and Social Survey, the total number of mortgages granted 2002 amounted to approximately $8.5 billion.
The previous year saw total mortgages valued at approximately 8.2 billion dollars distributed. Building societies contributed approximately 3.2 billion to the total value of mortgages approved in 2001 and $4 billion in 2002.
Mortgages were also financed by the National Housing Trust (NHT) and other lending institutions with the NHT financing $4.6 billion in mortgages in 2001 and declining to approximately $4 billion by the end of 2002.
