Interview: Jean-Paul de Meillac
How has the nature of property sales evolved as Trinidad and Tobago returns to growth?
JEAN-PAUL DE MEILLAC: Trinbagonians have done exceptionally well over the years thanks to the strong oil and gas sector, which has injected a vast amount of liquidity into the financial system. As a result, stakeholders have been able to keep properties in their investment portfolios. However, as we enter the fourth year of economic downturn, sellers are now realising that they need to adjust their expectations.
Whereas previously a large portion of business came from sales at price points between TT$3m ($443,000) and $6m ($886,000), we have seen a decrease in sales at these prices, with most properties now selling at TT$2.5m ($369,000) and below. This demonstrates how much the majority of buyers can afford with combined incomes. Investors who in the past would have bought high-end properties to lease to expats have now exited the market.
There has also been a marked change from house and land ownership to townhouse and apartment-style living. Developers are now building properties at greater densities and offering products that are more approachable. A readymade townhouse is more palatable to first-time buyers than buying empty land or real estate in need of work. The market demands this type of mid-range property: it is affordable, offers ample security, and nowadays, with busier lifestyles and long office hours, hard-working individuals want to come home to a finished, maintained space.
Lastly, there has been a rise in the number of mixeduse developments, where everything can be found in one complex, such as a basic grocery store and a small gym, and occasionally a running track or pool.
What steps should be taken to make data more readily available for real estate?
DE MEILLAC: The platform through which the real estate market gathers data must be made more accessible. Data must be accumulated, aggregated and then verified diligently before it can be presented to the wider public. Currently, the approach is very traditional: hard copies of deeds are kept in a registry in downtown Port of Spain and uploaded to a rudimentary online repository, but even that information is limited. The system must be modified, upgraded and made more user-friendly. By including the entire real estate industry, we could then build a true database.
The reality is that without data, we do not have a clear and transparent view of movements in the real estate market. For instance, if an individual buys a property tomorrow morning, it is impossible to know statistically whether they bought at a fair price or if they were oversold, unless they have comparable data reference points or they are well advised by professional real estate agents. Valuers must have an understanding of the market, and brokers would benefit from understanding the true lie of the land by filling the gaps in their knowledge. By introducing more data into the market, we can bring new evidence into the realities of the vendor-broker partnership.
In what ways would changes in foreign ownership regulations impact local property demand?
DE MEILLAC: The landholding licence laws have significantly undermined the Tobagonian real estate market. As it stands, property purchase in the country is strictly for Trinbagonians, which has severely stymied the potential for growth and the number of transactions in the market.
Relaxing the licensing laws would breathe new life into the real estate sector in Tobago. Not only would it certainly drive more traffic their way, but it would also attract more business from foreign investors. Given that the current situation has endured for almost eight years and that there are few positive elements to take away from it, it is high time that we see a change in these laws, in order to reverse the current trend.
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