Howai: Push for more mortgage lending

He thinks this can be done by developing a national mortgage loan guarantee facility or credit insurance scheme “which could reduce default risk.” He is calling on Government to consider reducing VAT on certain construction materials, if it wants to ease problems in its national housing thrust.

Central Bank deputy governor, Dr Shelton Nicholls, wants to see a system that will properly map out housing developments in TT.

Both men articulated their views at the 2006 Housing Colloqium at the Crowne Plaza Hotel in Port-of-Spain last week.

While expressing support for Government’s initiatives to provide affordable and high quality housing for the population, Nicholls suggested that it may be wise to develop a range of indices in order to properly map out housing development in the country.
He argued that this was necessary since the information currently being used as somewhat skewed at this time.

Nicholls said such a system should include a property price (retail and commercial) index, property rental index and a housing rental index. He added that the Central Bank has designed a survey with the Central Statistical Office and the Housing Development Corporation of TT to address concerns in the real estate sector.

Nicholls added that the nation’s real estate market was “very active” at this time and mortgage loans in TT at this time were just under $7 billion.

Howai noted that there continues to be concerns over “the growing cost of hardware materials for the housing sector” as he pointed to Government’s plan to build 100,000 houses over the next decade.

“The Government may now wish to consider reducing VAT on certain construction materials,” he said,

He said the commercial banking sector has always and continues to play a very active role in the real estate sector.

Howai boasted that FCB has been able to target some of the mega projects within the construction sector and provide adequate financing packages. “As a result, the lending of FCB to the construction sector grew from less than $100 million to just under $75 billion at December 2005. FCB has also taken measures to impact the land and home ownership area of the construction sector,” Howai stated.

He also noted similar efforts being undertaken by Republic Bank and the RBTT Merchant Bank.