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30/03/07 - The Real Estate Market in Trinidad & Tobago |
Over the last 4 years the real estate market has
certainly changed considerably and depending on your perspective, it is either a great time or a frustrating time
but whatever your perspective, it has certainly been the centre of most conversations in both the business and
social circles.
Everyone is trying to predict when the “run up” of real estate prices will come to an end, if at all. Just about
every sector (residential, commercial and retail) of the real estate market has experienced some aspect of price
appreciation as well as most communities have seen strong appreciation.
Three main factors have contributed to the strong real estate market:
First, declining interest rates, as the mortgage rates fall, a buyer can afford a larger mortgage with the same
monthly mortgage payment, thus allowing a buyer to pay a higher price for the same property.
Secondly, the high liquidity in the market has brought down the returns on the “typical” financial investments such
as savings accounts, mutual funds etc.. This in turn has encouraged people to look at other opportunities available
to them to place their money in more attractive investments. Of course one of these options has been into real
estate.
Third but by no means least is the outlook for the Trinidad and Tobago economy. Market confidence is a significant
factor that effects a buyer’s decision to invest in real estate and the outlook on the Trinidad and Tobago economy
for the short and medium term is expected to be quite strong. The factors have influenced the market which has seen
double digit levels of appreciation in properties in many areas in Trinidad, such as “The Western Peninsuela”,
Trinicity/Arima, St. Augustine, Chaguanas and San Fernando to name a few specific areas.
All of the real estate activity in Trinidad has begun to attract quite a bit of interest in Trinidad and Tobago and
thus there has been an increasing number of foreign investors as well a citizens residing abroad considering
Trinidad as a viable investment option.
To focus briefly on Tobago, things have been certainly happening quietly in Tobago. The air lift (number of flights
arriving) into Tobago has been steadily increasing which hopefully will bring more tourist to Tobago. This will help
the occupancy levels of all the villas and hotels and in turn improve the real estate values. There has definitely
been an upward trend in pricing over the last few years and this is sure to continue once the visitors keep
arriving. Another factor that has helped put Tobago on the map is the new large scale developments currently under
way. The original being Mount Irvine but the latest being Tobago Plantations and Angostura’s Golden Grove
development. Through their marketing drives they have begun to put Tobago on the World Map. In terms of the
appreciation of real estate prices, it is hard to predict but suffice to say that all the factors are there to make
a long term investment in Tobago worth looking at.
Several years ago, the Trinidad Government made it a lot easier for foreign investors to buy in Trinidad. Once they
meet a few simple criteria they can purchase without having to go through a license application, which can be long
and cumbersome. For a foreign investor to buy a residential property, all they need is to make sure the property is
one acre or less, all funding for the property is sourced from outside of Trinidad and Tobago and they must not own
any other property within Trinidad and Tobago. The same goes for commercial ventures except that a commercial
venture can purchase up to five acres of land
Trinidad and Tobago has really been the bright spark in the Caribbean and is expected to be so for the foreseeable
future. This positive outlook certainly has helped the Trinidad real estate market.
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