Interview: Roodal Moonilal
What are the investment priorities in the housing development programme?
ROODAL MOONILAL: Over the past five years, we have ramped up both new construction and renovation of existing units, while at the same time trying to reduce crowding out of the private sector. As a result, we started distributing 100 homes a week in March 2014, and we will continue to do so until the end of 2015. Beyond the short term, the country has to address the critical mismatch between demand and supply of housing. The country can only construct 7000-10,000 quality housing units each year, while there is a database of more than 160,000 citizens waiting for housing.
How can the private sector contribute to residential housing development in Trinidad and Tobago?
MOONILAL: The private sector in T&T has land and huge liquidity. There are two main reasons why private companies are not building 20,000 housing units per year when there is a market waiting to be served. First, the cost of construction is high, resulting in real estate prices that are not affordable for the wider population. Second, bureaucracy and statutory approvals are discouraging investments. In our recent budget, we have provided greater incentives for private construction and tried to remove some bureaucratic challenges.
We are also working with the financial sector to get private sector-led construction to serve the public. The government will supply the project management, drainage systems and applicants, while funding will be private. We buy completed units at a competitive price, and resell them to the applicant at a 70% discounted price. With a 30% subsidy, we can save on the general inefficiency of public construction. The response from the private sector is positive and we have started a pilot project in San Fernando with Republic Bank. Additionally, 48% of Trinidad is inhabited and improved transport infrastructure is key to promoting private sector development. Actually, along new highways real estate development is already becoming more appealing.
How is the real estate market being influenced by cultural and social dynamics?
MOONILAL: There are cultural issues stemming from a history as a plantation economy. People in T&T, aside from the relatively small cities of Port of Spain and San Fernando, are generally not interested in high-rise townhouses and apartments. It is a car-driving society, and people tend to prefer single-family units with a plot of land to be used for the garage, garden and so on. To reduce the demand for single-family units, we are targeting young people by increasing the number of quality and high-design apartment-type developments.
If we compare against the experience of Singapore and India, only quality of life can drive this cultural change. As a matter of fact, the demand is enormous wherever middle- and upper-middle-income apartments have come into the market, such as Victoria Keys in Westmoorings, Fidelis Heights in St Augustine and a similar development in south Trinidad. There is room to climb higher at competitive prices. If an apartment in One Woodbrook Place costs TT$2m-3m ($308, 400-462,600), with us it would be subsidised to TT$800,000 ($123,360), which is beneficial to the whole market.
What is being done to further enhance commercial real estate in north-west Trinidad?
MOONILAL: While Chaguaramas is being developed as the major entertainment centre in the region, the development of Invader’s Bay is set to create a new international business centre for Port of Spain, focused on the insurance, banking, hospitality and retail sectors. We have estimated that this project can ultimately create GDP growth of 10%. Two investors have already been selected for the commercial development of two blocks in the area. They are now providing the ministry with their development plans so that we can start work on the infrastructure for the entire area, which will involve TT$1bn ($154.2m) worth of investment. British, Chinese and Saudi Arabian companies have already expressed interest in building and financing projects.
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