Home' Trinidad and Tobago Guardian : January 7th 2016 Contents BG4 COVER STORY
BUSINESS GUARDIAN www.guardian.co.tt JANUARY 7 • 2016
The head of a local real estate
grouping says indicators are
suggesting there is some slow-
ing down in the real estate
industry and a slowdown in
demand for residential pur-
chases, with customers becoming more rate
sensitive and cost sensitive.
President of the Association of Real Estate
Agents (AREA), Sally Singh, told the Business
Guardian that it is difficult to paint a com-
prehensive picture of the real estate sector in
the July to December 2015 period because
there is limited data in terms of real estate
But, referring to concrete indicators, Singh
pointed to Central Bank data on mortgage
lending that stated that year-on-year basis,
real estate mortgage loans rose by 7.3 per cent
in the January to September 2015 period, which
was the slowest rate of expansion since early
The Central Bank s Monetary Policy Report---
released on December 7---said: "The slowdown
coincided with an increase in the weighted
average interest rate on new mortgage to 4.58
per cent in September 2015, from 4.28 per
cent in March.
"Additionally, a fall in the number of loan
applications observed over the past few quarters
suggests there may be further slowing in res-
idential real estate mortgage lending."
Singh said there was also some evidence of
a decline in lending to the construction and
other services sectors during the stated peri-
od.She said individuals are exercising more
caution about entering long-term mortgages
and investors in real estate are adopting a
wait-and-see approach when it comes to
investing in real estate in T&T.
"As we live on twin islands, land is limited
and there is always a demand for properties.
However, we are now seeing property prices
noticeably more negotiable as compared to
the same time last year. In previous years there
was an inflated demand by investors who were
not only actively buying up land and building
properties but, establishing various develop-
ments and subdivisions.
"In recent times, with the current global
economic situation, these investors have adopt-
ed a more conservative approach as they are
restraining from purchasing properties and
are holding out for the lowest possible prices.
This wait-and-see approach by investors has,
and should, register a general decline in the
volume of real estate transactions," Singh said
in emailed responses on Tuesday.
This comes after former Central Bank Gov-
ernor, Jwala Rambarran s early December 2015
announcement that T&T was in a recession
and would feel the full brunt of it this year.
Singh said demand for property by indi-
viduals in Trinidad is mainly in the South and
central parts of the country. This can be com-
pared to the business community which is
mainly demanding warehousing space on a
She said that AREA believes that part of
the reason for the slowdown in demand for
housing could be because "middle income
buyers have, in a way, collapsed unseen."
"This segment of the land and housing mar-
ket is the silent majority that have been neg-
lected because they are not screaming out for
help as other income segments.
"We would like the State lead by example
and stimulate middle-income home construc-
tion, and then let the private sector follow.
We would welcome initiatives by the Govern-
ment to make property ownership more afford-
able for the middle-income sector where
demand is the greatest.
"If we anchor young families in T&T, the
social and economic benefits would be con-
siderable and impact on job creation, inno-
vation, a return on investment in education,
and a more healthy contribution to the social
and political life of the country.
"As a country, we need our middle class as
it is the glue that binds us together as a society.
It creates a healthy economy with clear oppor-
tunities for sustainable growth."
Asked whether the members of the asso-
ciation are planning to lay off any staff mem-
bers, she said the situation is being "carefully
"In these uncertain times, our membership
need to focus on innovation and partnering
with all stakeholders to encourage other mar-
kets such as the middle income housing.
"In cases where our members operate small
agencies and the residential broker is also the
main salespersons and owner, the adminis-
trative staff would be small or nonexistent.
With regards to larger agencies where the
salespersons mainly work on commissions,
their employment would be determined by
their ability to perform as is the case gener-
Overall, the market, according to Singh,
experienced some changes.
"The recent trend among prospective buyers
in the residential market is to search for land
to build homes with a view to control mortgage
loan amount as opposed to purchasing house
and land where property values are higher.
"There has been a softening in the local
expatriate rental market as a result of the lower
energy prices. In addition, many energy-based
companies have downsized their operations
which, in some cases, resulted in smaller or
reduced office space. Many landlords, as a
result, have seen a reduction in income.
She assured that AREA continues its effort
to develop its members through ongoing edu-
cational activities and the group will continue
to be the activist for proper legislation which
will govern the industry.
Real estate sales slowing
president of the Association of
Real Estate Agents
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