Home' Trinidad and Tobago Guardian : March 15th 2015 Contents SBG6 NEWS
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt MARCH 15 • 2015
I propose to expand the existing 2.0 per cent
mortgage programme by increasing property
values from $625,000 to $850,000 and increas-
ing the combined monthly income of households
from $8,000 to $10,000 and to supplement
that programme by introducing a new 5.0 per
cent mortgage programme for households with
a combined monthly income of greater than
$10,000 and less than $30,000 toward accessing
a mortgage of greater than $850,000 but not
exceeding $1.2 million, this measure will benefit
26,100 applicants within the HDC framework
and a similar amount in the private sector; and
I propose to improve the tax allowance from
$18,000 to $25,000 per household, per annum
on mortgage interest paid in the year of income
for first time homeowners for five years, including
those years utilised by existing beneficiaries.
Finance Minister Larry Howai
Excerpt from the budget statement 2015.
As the Sunday BG gets
ready to mark its first
year in existence, we
take our readers back
to one of our very first
articles, into the lives
of John and Mary, a
mobile middle-income couple. When we last
spoke to them, they had a baby on the way
and lived in rented apartment, paying $4,000
a month for the privilege. Mary despaired that
the young family would ever be able to afford
a suitable home.
A year later Mary's disappointment is pal-
pable, even with the provisions made in last
year's budget, presumably made to meet mid-
dle-class, middle-income demand for housing.
"The Government announced this five per
cent mortgage scheme and we got so excited.
We went down by TTMF only to find out we
are $500 over the limit. We don't qualify for
the mortgage," said Mary.
More difficult to own a
house in 2015
The baby is now here, expenses are mount-
ing and the Central Bank has confirmed in
its latest Financial Services Report that John
and Mary have little reason to hope that things
will improve in the short to mid term in their
hunt for a home.
According to the report, the median price
of three-bedroom house in 2014 is 1/12 times
higher than it was in 2008, the price of a
three-bedroom home has more than doubled
over the past 15 years and affording a house
became more difficult over the past five years.
The couple told the Sunday BG that they
have shelved any dreams of owning their own
home and are taking a relative up on an offer
to rent a three bedroom home, being built on
"We will rent that property, which is three
bedrooms, compared to where we are now,
which is one, for around the same cost. In
that sense things have improved. We get more
bang for our buck, in that we will have more
space. But I have now put off the house dream
for the next five years or so."
Mary said the harsh reality is that, even
with the concessions made in the budget,
they still cannot afford a home that they want.
"The thing about it is, they (the TTMF)
look at the before tax income. And we pay
such a substantial amount of tax it is not
funny. Our joint salaries are $30,000 plus,
our take home is $23,000. And then you add
to that loans, rent, credit card debt. Remember
last year there was no baby, now there is. So
we have daycare, formula. The bills are going
up and the money is remaining the same. We
haven't been able to save any money."
John and Mary resist suggestions that they
may be unreasonable in their expectations of
what they can get as young couple starting
They investigated the possibility of getting
a house through the HDC, something they
were unwilling to just a year ago.
"Why the HDC is the only place that you
could probably qualify for a decent house at
$1.2 million? And that is not being made avail-
able," said Mary, who added that the govern-
ment homes seemed to be right in the middle
of a political minefield with a general election
"We don't have party cards," Mary said
"I don't want to say it, but the middle class
is suffering. People are probably going to judge
me for saying that, but it's true. Young pro-
fessionals have it the hardest and it is not
because the expectations are too high."
She made reference to Diamond Vale, a
housing community built in the 1960s, where
individual homes averaged around $60,000
at the time. She said even if most of the homes
were improved to the point of substantially
adding to their value, she doubted that they
were worth the prices homeowners were call-
ing for now.
"Even the simplest of homes is $1.7 million.
These are homes constructed in the 1960s.
It is almost as though the sellers are taking
advantage of an unregulated market."
Intentions good, but policy
failing middle-income earners
A key failing of the latest budget concessions
for middle class, middle income homeowners
is how they sometimes exclude the very people
policymakers are intending that they help.
"With the five per cent mortgage plan, you
can get 95 per cent financing. Without it, we
can't access 95 per cent financing. Ninety
five per cent would have made it easier to
afford a higher mortgage. Instead of going for
a $1.2 million, you could have gone for a $1.7
million, because we would have needed less
of a downpayment. But we don't qualify for
This is not to say that the couple is not
appreciative of efforts to bring homeownership
closer to people like themselves.
"The two per cent mortgage plan is excel-
lent. The five per cent mortgage plan is excel-
lent. It shows that they are interested in trying
to help people who don't qualify for homes
to be able to do so. However, there is no grey
"I feel that we, my nuclear family, exist in
a grey area. On paper, we could almost be
considered affluent to some people. But, in
reality of loans and people having to pay for
daycare because we work after 4 o'clock in
the afternoon, rent and all those different
things, we are in the grey."
Mary said policymakers should try to con-
sider cases on an individual basis.
"It would be helpful if you had the oppor-
tunity to make a case. We understand why
there are parameters yes, but $500 over the
Revisiting John and Mary
A year later...
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