Economic Report for Aug 18, 2026
Local Market Update
Jamaica’s property market is showing signs of stress as dozens of mortgaged properties head to auction in August. A catalogue of 46 properties across eight parishes is scheduled for sale by D.C. Tavares & Finson Realty in August and 26 at the Altamont Court Hotel. Separately, Scott’s Realty is conducting an online auction of a Kingston apartment with bidding starting at JMD 52 million.
These auctions come amidst a sharp rise in loan delinquencies. According to the Bank of Jamaica, past-due loans jumped 79% to JMD 73.6 billion in April, driven by a 25-fold surge in unserviced construction loans to JMD 12 billion, the largest increase in nearly a decade. While overall non-performing loans remain stable at JMD 37.6 billion (under 3% of total loans, well below the BOJ’s 10% concern threshold), the spike in arrears highlights growing strain on borrowers facing higher interest rates and reduced disposable income.
Construction defaults are particularly concerning, as developers who financed projects during the post-Melissa rebuilding surge now face rising input costs and tighter credit conditions.This has led to incomplete projects and repossessions, with National Commercial Bank recently placing three dozen properties valued at over JMD 2 billion on the market through private treaty.
However, the alarms aren’t going off just yet. Non‑performing loans (NPLs) held steady at in April, remaining unchanged from both the prior month and the same period last year. As such, NPLs remain under 3.0% of total loans, well below the 10% threshold that typically raises red flags for the BOJ. However, this stability masks the strain on households, as successive shocks since the pandemic have eroded disposable income and driven prices higher across the economy.
Despite these pressures, demand in urban centres continues to support property values, and auctions may create opportunities for cash-rich investors to acquire assets at discounted prices. However, the trend of rising defaults signals that real estate-backed instruments will carry higher risk premiums, and customers should anticipate upward adjustments in interest rate charges as lenders reprice credit risk.
Global Market Update
In July–August 2026, global markets delivered mixed signals that directly shape Jamaica’s inflation, trade, and investment environment.
- United States: The July jobs report showed 23,000 job losses, the first decline since February, while unemployment edged down to 4.1%. Inflation eased to 3.4% year-on-year, prompting the Federal Reserve to hold rates at 3.5–3.75%. For Jamaica, softer U.S. labour demand could temper remittances, though easing inflation reduces imported price pressures.
- Eurozone: Annual inflation rose to 2.9% in July, driven by a 10% surge in energy costs, while core inflation ticked up to 2.5%. Despite this, Q2 GDP showed resilience. For Jamaica, higher European energy costs feed into fuel imports, while household strain in Europe may soften tourism demand.
- China: Manufacturing PMI fell to 49.2 in July, signalling contraction, with declines in new orders and construction activity. S&P Global PMI also slipped to 50.9, its lowest in four months. Slower Chinese demand raises costs for imported construction materials, adding pressure to Jamaica’s housing and infrastructure sectors.
- Middle East Oil: Brent crude surged 24% in July to US$90.12 per barrel, while WTI rose 21% to US$84.67, as the Strait of Hormuz closure and Bab el-Mandeb attacks cut Gulf exports by ~40%. Elevated oil prices feed directly into Jamaica’s inflation, raising transport and electricity costs and pressuring the BOJ to maintain tight liquidity.
Investor Implications
Fuel prices continue to increase and with the war in the Middle East having no end in sight, the cost of oil and its products to continue the go up or at the very least fluctuate. It would follow then that the BOJ will take steps to reduce inflation, which is already projected to exceed the inflation target only halfway through the year. These generally take form as FX interventions and policy rate adjustments.
The issue of rising fuel prices remains one that affects the entire world. Many of the countries that Jamaica imports goods from have raised prices to counteract the increased expense, which means Jamaica receives the impact of these prices increases twice over.
All this taken into consideration it would be wise for investors to anchor their portfolios in stable, income generating assets. The MoneyMasters M7 Real Estate Fund is well-structured and thus well-positioned to capitalized on the likely increase in interest rates on constructions loans.