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Real Reasons Why Real Estate is So Expensive in T&T

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Real Reasons Why Real Estate is So Expensive in T&T

Postby Trinbagoviews » January 14th, 2014, 12:17 pm

A persistent cry by many young and middle aged professionals is that real estate prices are just way to high especially on a small to medium income budget. Why have prices continued to rise so severely?

Simple demand and supply dynamics can help explain this. Here are a few reasons that often go unexplained:

1. Onerous Inefficient Regulatory System Severely Stymies The Supply of Homes

The lengthy and inefficient Town and Country and Regional Corporation approval process which takes on average about one year deters prospective home builders from building homes. This has the effect of restricting supply consequently decreasing the stock of homes available on the market. Prices are therefore forced upward because existing homes become more scarce and prices are bid up by prospective home purchasers.

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Moreover how many more homes and buildings could have been constructed were they not being held up by the snail's pace approval process. Not only is the country denied the increased stock of houses but it is denied all the legitimate employment and commercial activity that would have followed i.e. construction employment, cement sales, steel, sand, aggregate, plumbing supplies, roofing, mortgage loans etc. Institutionalized bureaucracy places hidden but significant drag on housing supply.

2. Economic Crowding Out

When construction materials are are demanded by an institution with deep pockets such as the state to build unnecessarily big infrastructure projects: tall buildings, poorly built houses that have to be torn down and rebuilt etc. it causes increased prices.
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Consider that available construction material and labour is finite, and when government enters the market for construction material and labour the state is actually competing against private individuals for access to these finite resources the end result are increases in home construction costs.

Private construction is therefore crowded out which could have been done cheaper, faster and to the specific tastes and preferences of individual citizens. Ironically the construction prices the tax payer pays is bid up by his/her tax dollars when trying to build a home.

3. The Illegal Drug Trade - Money Laundering

Investment in real estate is a popular technique of concealing the source of money obtained by illicit means. A classic approach is to purchase real estate with illegal proceeds and subsequently dispose of the asset. The proceeds from the disposal thereby appear to outsiders to be legitimate income. Real estate may also be used as an investment vehicle to park illicit gains for the short to medium term.

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4. Money Supply Expansion - Inflating Real Estate Prices

A major reason real estate prices have been going up rapidly is because the Central Government by way of the Central Bank has constantly been increasing the money supply. This serves to inflate all prices including real estate prices.

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The problem is made exponentially worse when commercial banks in turn use the consequent increased bank deposits to create additional credit or purchasing power further bidding up prices. Worse yet when there is no increase in productivity or output. This phenomena is not only present in the housing market but also in overall price levels throughout the country. We therefore have a few more houses being chased by a lot more TT dollars.

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5. Very Real Inflationary Concerns


As alluded to above there is significant excess liquidity (cash and cash equivalents) slushing around in the economy looking for a home consequently, a significant portion of these funds end up in real estate pushing up real estate prices since this asset class is viewed as an inflationary hedge and a potential income generating asset.
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Moreover because of the limited availability of attractive investment options in T&T excess funds naturally flow into real estate as a safe investment vehicle especially when instinctively people suspect inflation to be already here or on the horizon. This further stokes demand for real estate and real estate prices.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby noshownogo » January 14th, 2014, 12:23 pm

In before Pioneer

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Fearless » January 14th, 2014, 12:31 pm

very interesting post

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby sliderz1 » January 14th, 2014, 12:34 pm

heard some cornt while walking through Arima saying government should subsidize land prices.

f*q ollur feel it is

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby pete » January 14th, 2014, 12:59 pm

Isn't that what the HDC is for?

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby JoKeR1980 » January 14th, 2014, 1:06 pm

supply....demand....

that is all...

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Dizzy28 » January 14th, 2014, 1:08 pm

pete wrote:Isn't that what the HDC is for?


HDC subsidizes houses, LSA subsidizes land.................................AFAIK!!

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby VexXx Dogg » January 14th, 2014, 1:10 pm

The elusive dream of home ownership.
One day, man. One day.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby X2 » January 14th, 2014, 1:13 pm

HDC is like Cepep for housing ent ?

Why shouldn't gov't subsidize some land ? They selling our energy resources but citizens barely see a result of the wealth gained. Poor infrastructure, poor city planning, squandering of state monies on stadiums that never get used and buildings that are not being occupied.

Give we plebs a pittance nuh... Like tossing a small pack of Crix from dem Prado.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby spirited721 » January 14th, 2014, 1:14 pm

Trini ha too much morney. When man calling high price people still buying normal instead of putting off the purchase till the price is reduced. Trini don't stand for anything collectively but always complaining and begging the government.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby New_SPECIES » January 14th, 2014, 1:20 pm

pete wrote:Isn't that what the HDC is for?

Nah... The purpose of HDC is:
(1) to "voter pad".... (notice many of the settlements are in marginal constituencies)
(2) to bribe certain individuals for their vote,
(3) to give squatters another Free place to live.... (there are almost more people who just don't pay compared to those who do)
(4) to corruptly spend tax-payers money,
(5) to give "big contractors" they contracts after they sponsored campaign etc..
(6) to corruptly house individuals considered to be in "high positions" (eg. most of them in Fidelis Heights etc)
(7) to provide a shelter for the few individuals who suffered from a disaster (for example) after they reach news..
(8) to corruptly share out land - so that the (supposedly low income) owners can build buildings for tenants
(9) to give other citizens a false sense of hope to "one day get a house"
(10) to provide a means for (big) people inside HDC to "sell" houses and pocket the money.. (along with an initial bribe),
... like what has been and is still going on right now in Roystonia.
Last edited by New_SPECIES on January 14th, 2014, 2:00 pm, edited 2 times in total.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby cornfused » January 14th, 2014, 1:21 pm

Having tried to examine this vexing issue . I believe points 3-5 above as the most valid explanations for this issue . Another point that seems to be missing is the issue of legal land titles . Its no secret that a prospective clients have certain real estate companies continually in court for issues relating to land ownership .

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Trinbagoviews » January 14th, 2014, 1:39 pm

VexXx Dogg wrote:The elusive dream of home ownership.
One day, man. One day.


Word to the wise don't make the mistake and opt / wait for a HDC house.... its a disaster looking for a place to happen.....

http://www.trinbagoviews.com/2013/02/wh ... house.html

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby TriniAutoMart » January 14th, 2014, 1:59 pm

Trinbagoviews...some people have no choice.
Everyone doesn't make in excess of $20,000 per month.
How do you expect this majority of the young population to get housing unless they get inherited land or build a shack in the bush?
HDC is their only option.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby zoom rader » January 14th, 2014, 2:25 pm

House have fi rent, $$$ in the bank

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby wickedbreed » January 14th, 2014, 2:36 pm

New_SPECIES wrote:
pete wrote:Isn't that what the HDC is for?

Nah... The purpose of HDC is:
(1) to "voter pad".... (notice many of the settlements are in marginal constituencies)
(2) to bribe certain individuals for their vote,
(3) to give squatters another Free place to live.... (there are almost more people who just don't pay compared to those who do)
(4) to corruptly spend tax-payers money,
(5) to give "big contractors" they contracts after they sponsored campaign etc..
(6) to corruptly house individuals considered to be in "high positions" (eg. most of them in Fidelis Heights etc)
(7) to provide a shelter for the few individuals who suffered from a disaster (for example) after they reach news..
(8) to corruptly share out land - so that the (supposedly low income) owners can build buildings for tenants
(9) to give other citizens a false sense of hope to "one day get a house"
(10) to provide a means for (big) people inside HDC to "sell" houses and pocket the money.. (along with an initial bribe),
... like what has been and is still going on right now in Roystonia.



I see what you did there... :lol: *agreed*

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby mark2.0 » January 14th, 2014, 5:16 pm

government is to blame.

1. supply and demand, if HDC starts to give out houses the demand will go down causing the privite realestate merchants to lower their prices.
2. there should be some sort of regulation where cost factors is involve.
3. house lottery system is pure bull $h't... change that
4. all abandon or unoccupied structure should be auction within a 4 year period.
to name ah few.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby De Dragon » January 14th, 2014, 9:27 pm

Every beyotch and dey bredda calling million + fuh dey lil 2X4 house no matter wey it located!

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby MG Man » January 14th, 2014, 9:50 pm

the young professional dumfucks who are paying upwards of a mil for a flat box are the ones who have screwed the market for everyone else
just like the twats who pay 220+ for a corolla :-/

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Conrad » January 14th, 2014, 10:21 pm

cornfused wrote:Having tried to examine this vexing issue . I believe points 3-5 above as the most valid explanations for this issue . Another point that seems to be missing is the issue of legal land titles . Its no secret that a prospective clients have certain real estate companies continually in court for issues relating to land ownership .


THIS


MG Man wrote:the young professional dumfucks who are paying upwards of a mil for a flat box are the ones who have screwed the market for everyone else
just like the twats who pay 220+ for a corolla :-/


And that.


...and somehow our economy refuses to pop like the rest of the world.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby mitsutt » January 14th, 2014, 10:21 pm

repostinb4pios
spotforsale

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Conrad » January 14th, 2014, 10:28 pm


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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Corn Bird » January 14th, 2014, 10:33 pm

Conrad wrote:...and somehow our economy refuses to pop like the rest of the world.


loan criterion in trinidad is perhaps stricter than other countries. credit cards are given away like candy to college students in the states.

the trinidad banks will probably allow risky loans in the case of cars but not for houses.

which means in an economic downturn, not that many trinidadians default on home mortgages, and so no glut is created, and therefore prices can remain high

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Conrad » January 14th, 2014, 11:17 pm

Corn Bird wrote:
Conrad wrote:...and somehow our economy refuses to pop like the rest of the world.


loan criterion in trinidad is perhaps stricter than other countries. credit cards are given away like candy to college students in the states.

the trinidad banks will probably allow risky loans in the case of cars but not for houses.

which means in an economic downturn, not that many trinidadians default on home mortgages, and so no glut is created, and therefore prices can remain high


What economic downturn? :lol:

If there trully is an economic downturn I don't see how the average home owner can guard against a lost of income and ability to pay the bank.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby wagonrunner » January 14th, 2014, 11:22 pm

Conrad wrote:
cornfused wrote:Having tried to examine this vexing issue . I believe points 3-5 above as the most valid explanations for this issue . Another point that seems to be missing is the issue of legal land titles . Its no secret that a prospective clients have certain real estate companies continually in court for issues relating to land ownership .
THIS
MG Man wrote:the young professional dumfucks who are paying upwards of a mil for a flat box are the ones who have screwed the market for everyone else
just like the twats who pay 220+ for a corolla :-/
And that.
...and somehow our economy refuses to pop like the rest of the world.

because we have too many insecure idiots with a chip on their shoulder and a need to compensate the only way they know how - by buying what's not worth it at prices others can ill afford even though the cost exceeds the value.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby AdamB » January 14th, 2014, 11:47 pm

If yuh cyar afford land where price is high, options available:
1. Buy in the bush
2. rent instead
3. marry someone with land
4. save up yuh money
5. squat for long enough and you'll have more rights than the taxpayers who will pay for the land when you eventually "buy" for the land.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby AdamB » January 14th, 2014, 11:57 pm

Conrad wrote:
Corn Bird wrote:
Conrad wrote:...and somehow our economy refuses to pop like the rest of the world.


loan criterion in trinidad is perhaps stricter than other countries. credit cards are given away like candy to college students in the states.

the trinidad banks will probably allow risky loans in the case of cars but not for houses.

which means in an economic downturn, not that many trinidadians default on home mortgages, and so no glut is created, and therefore prices can remain high


What economic downturn? :lol:

If there trully is an economic downturn I don't see how the average home owner can guard against a lost of income and ability to pay the bank.

Our economy has proven its resilience after big problems from 2008 in the US and Europe. This is the good. The bad is that there is too much disparity in salaries ranging from $5000 to $20,000+ for the same job in different sectors.

The standard is that in our type of economy ppl MUST utilize 40% of salary for car and house loans. So in the upper scale, $3000 for car and $5000/mth for house. SCREW THE LOW INCOME PPL!!

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Corn Bird » January 15th, 2014, 12:11 am

Conrad wrote:
What economic downturn? :lol:

If there trully is an economic downturn I don't see how the average home owner can guard against a lost of income and ability to pay the bank.



well, there was some sort of economic event in 2009/2010 that lead to a $20 billion dollar bailout of clico. and that did have some effect on the trinidadian economy. prices of houses in some areas dropped around 5-10%. whether that event had a lasting effect on house prices is anyone's guess. maybe that period more affected the upper middle class who were able to ride it out.

then again, i remember (in 2010) one business owner telling me that he had absolutely no problem getting (semi-skilled) people to work for $150 per day

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Ted_v2 » January 15th, 2014, 4:50 am

Trinidadian overdo everything.

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Re: Real Reasons Why Real Estate is So Expensive in T&T

Postby Strauss » January 15th, 2014, 5:23 am

Trinidad is the only place where I know real estate prices go UP and UP.

Flooding? Up.
Crime rate increase? Up.
Cost of labour / infrastructure goes down? Up.
Competition from surrounding ventures? Up.
Price already very high? Up.

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