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The tropical islands of Trinidad and Tobago have seen prices of real estate fall of late, after over a decade of strong growth. The decline is a result of factors that include the global economic crisis, and a new law that requires foreigners to acquire a license in order to buy property. To learn more about the current state of Trinidad and Tobago real estate, see the following article by Global Property Guide.

trinidad and tobago
After enormous price increases from 1991 to 2006, the property market in the twin-islands of Trinidad and Tobago has slumped during the past two years.

In 2008, the median house price dropped by 9% to about TT$1,000,000 (US$164,474) from a year earlier, according to figures from the Central Bank of Trinidad and Tobago (CBTT). When adjusted for inflation, the median house price actually fell by about 19% over the period.

In January, the collapse of CL Financial, one of the Caribbean’s largest conglomerates, hit confidence. So has the chaos following the February 2007 Foreign Investment Tobago Lands Acquisition Order, which in effect stopped foreigners buying property in Tobago. The stock market has declined sharply. Some steel and iron plants have also been shut down. Construction activity has ground to a halt.

Sales volumes have dropped by 20%, according to Stuart Spiers, owner of Stuart Spiers Real Estate Services. "Valuators are dropping the cost of property in line with the current economic downturn, and still sales are low," said Spiers.

In the first half of 2009, prices and transactions fell further.  "As the wider economy contracts, so too does the real estate industry,” said Richard Saunders, president of the Association of Real Estate Agents (AREA). "Real estate rentals and sales in the West have dropped while there remains no movement in the East.

Property prices in Trinidad and Tobago are likely to fall further in 2009, and to remain stagnant during most of 2010.  New mortgage loans are down. Prices of construction materials, especially cement and steel, are also dropping sharply.

Property prices in the islands rose by a spectacular 477% (157% in real terms) from 1991 to 2006, mainly due to economic growth caused by buoyant petroleum industry, and the boom in tourism and construction.

Economic slowdown

GDP growth in Trinidad and Tobago slowed in 2008 to only 3.4%, down from 5.5% in 2007 and 13.3% in 2006. In 2009, the economy is projected to grow by just 0.5%.

Trinidad and Tobago was previously one of the Caribbean’s fastest growing economies. It has one of the region’s highest per capita incomes, with GDP per capita in 2008 of more than TT$119,000 (US$19,000).

Oil and gas contribute about 40% of GDP and 80% of total exports. However, energy sector growth was only 0.4% in 2008, down from 1.7% in 2007.  The country has also a thriving tourism industry and financial institutions, though not as important as in many other Caribbean islands, and this non-energy sector growth has also declined somewhat, from 7.7% in 2007 to 4.8% in 2008.

Rising interest rates

Most real estate purchases in Trinidad and Tobago are made in cash. The mortgage market is small and slow to innovate.

In 2008, real estate mortgage loans outstanding amounted to about TT$10.9 billion (US$1.8 billion), up 20.6% from a year earlier, according to the Central Bank (CBTT).  However the size of the mortgage market has declined from 11.1% of GDP in 1995, to just around 7% of GDP in 2008.

Loan-to-value (LTV) ratios typically range from 75% to 90% of the appraised value of the property, with loan term period of 25 years.

The mortgage interest rate rose to 13% in the first quarter of 2009, up from 10.9% in the second quarter of 2008. In 2008, the CBTT raised benchmark interest rates several times to meet its single-digit inflation target.  Inflation rose to 12% in 2008, from 7.9% in 2007 and 8.3% in 2006. In 2009, inflation is expected to fall slightly, to about 7%.

Small rental market

Most long-term rental apartments are in Trinidad, the more developed island.  The long-term rental market has been sluggish due to the contraction in offshore businesses. The short-term rental market is now much more appealing to investors, because rentals paid by short-term vacationers are now much higher than the rents paid by long-term tenants.

In 2008, the average monthly rent for a three-bedroom apartment in Port of Spain dropped by 0.3% to TT$19,745 (US$3,248), a setback after a spectacular 40.2% increase in 2007, according to the UN International Civil Service Commission (ICSC).

New law freezes Tobago real estate


In Tobago, foreigners who want to purchase land must first obtain a license from the Tobago House of Assembly, since the February 2007 Foreign Investment Tobago Lands Acquisition Order.

Because no proper system is in place for property applications, the new law has almost grounded Tobago’s entire real estate market. In effect, foreigners cannot only buy property in Tobago with great difficulty.

The property sales of Sea Jade Investments (SJI) plummeted by 90% in 2008, said Dawn Glaisher, owner of (SJI). About 40% of the decline was attributed to the global crisis while the around  0% was blamed on the new law.

This article has been republished from Global Property Guide. You can also view this article at
Global Property Guide, an international real estate analysis site.