Real estate prices keep climbing in sister isle

From Mount Irvine to Charlotteville, land is selling faster than anything else right now.

Clean, green, serene Tobago is fast becoming a paradise for real estate agents and a nightmare for residents as the prices of real estate on the island have sky-rocketed by more than 100% percent in the past five to ten years, way beyond the reach of the average Tobagonian.

Prices for land in certain parts of the island range from TT$600,000 to TT$3 million for just an acre of land.

Real estate in the western part of the island continues to fetch the most handsome prices because of its infrastructural development as well as the heavy tourism base.

Areas such as Grafton, Royal Mt Irvine and the new Bon Accord Development are said to be in the upper range, with prices of land ranging from TT$2 million to TT$3 million. For less than an acre, land across the island now goes for TT$1 million to TT$1.5.

The island’s northcoast with its tranquil, rural villages and beautiful beaches is following hard on the heels of the west with one acre of land with a good view, especially in the Englishman’s Bay vicinity, being sold at TT$600,000 to TT$900,000.

“I have seen a US $80,000 property become $800,000,” said one agent on the island, noting that sales are driven by foreigners who are willing to pay top dollar for real estate that is dwindling quickly.

“They are actually willing to pay more than it is actually worth to us down here,” the agent said and took the view that if Trinbagonians were the only ones doing the buying and selling, prices would stay down.

“Traditionally, you keep it over a number of years and it slowly escalates. It is an asset, a long-term investment but nowadays people want to walk in and before a year is up, they want to put it back on the market at a profit. If it continues like this it will become pretty hard to control prices,” Dawn Glaisher of Sea Jade’s Investment said.

While Trinidadians and Tobagonians currently encompass the majority of buyers, residents living abroad and foreigners account for more than 20% of the market, analysts said.

Research shows though that some of the land sales are between family members trying to “save their heritage.” Still, for those who sell their land its a chance to move up or move out.

Over the past decade the island has become prime grounds for real estate, mostly due to the tourism industry which is the main source of income for Tobagonians. It is no conicidence that the majority of the lands purchased are being used for tourism based projects or to build luxury and holiday homes, agents on the island said. Several real estate agents indicate that foreigners looking for holiday homes or just somewhere to relax after retiring are the main driving forces behind the inflated real estate prices.

“Before tourism arrived, little land was ever sold but the whole process started in 1990 when the Foreign Investment Act was passed which allowed foreigners to purchase up to an acre of land,” another real estate agent explained.

“What you began dealing with then is someone who has US dollars or pounds to spend and they usually have more money than we do,” it was pointed out. “While they may not be rich, they could be pensioners who have saved up just enough money to come down here for somewhere warm to spend their winters or their retirement,” he added.

According to one agent, “The perception is that foriegners have money and automatically the price goes up, sometimes as high as one hundred percent,” he said.

The agent said that most of the foriegn real estate buyers are aware that they are being charged above market price, noting that owning a Caribbean home is usually considered to be an exotic item.

The other driving force behind the high real estate prices is the unscrupulous practices of vendors and some agents who “pull prices out of the air.” What happens is that prices are set beyond what the properties are actually worth without any evaluation attached to it, agents said. Lack of professionalism, training and simply greed to make a lot of money from a good commission have been cited as the dark side of the market.

Some analysts say that the implication of rising land prices is that the cost of living is being pushed up on the island.

“The concept of price is purely desire, greed and not value. There is a growing perception that real rstate is supposed to be a fast turnover or a fast profit but that is not what it is traditionally,” said one agent, who asked not to be named.

The sale of holiday villas is also flourishing. A four bedroom villa with a view of the sea can be bought at US $900,000 while the price for a three bedroom villa with a swimming pool can start at US $600,000 and go all the way up to US $1.9 million.

At the prestigious Tobago Plantations, units are being sold between TT$1.5 million and TT$3 million.

An unfurnished completed Angostura Samaan Grove home, for instance, has been estimated between TT$1.1 million and TT$1.8 million. These lots range from 7,500 sq ft to 12,000 sq ft and are currently being sold at TT$85 per sq ft.

Dawn Glashier of Sea Jade’s also pointed out that the prices of construction materials and labour have increased drastically over the years. She said the shortage of skilled labour was also driving up land prices.

Even as land prices rise on the island rise, Tobagonians are also being bogged down with rising apartment rental costs which now range from TT$1500 for an unfurnished studio apartment to TT$2,500 for a furnished one. A semi-furnished two-bedroom apartment currently starts at TT$2,500 while an unfurnished three bedroom apartment starts at $3,000. And as the costs keep rising, agents say that the Government will have to work quickly to provide affordable housing for the average resident who can no longer afford to purchase even a piece of land.

The only blemish in this lucrative property market is crime, agents said, noting though that so far it has had no impact on prices. “If it’s going down, we have not seen it,” an agent noted.