(Updated April 2010)

In keeping with the global economic recovery that has exceeded expectations, the local economy also appears to have recovered following four consecutive quarters of decline. Real GDP increased by 0.8% (year-on-year) in the last quarter of 2009 and the improvement seems to have continued so far in 2010 according to the Central Bank of Trinidad and Tobago. In addition, “Preliminary estimates suggest that the unemployment rate declined to around 5.2% in the fourth quarter from 5.8% in the previous quarter”. After reaching an all-time low of 1.3% at the end of 2009, headline inflation has increased to 5.1% in March 2010.

The Central Bank of Trinidad and Tobago, in an effort to support growth and employment, has lowered the “repo” rate to 5% - the lowest historical level. Following in step with the policy of the Central Bank, commercial banks have lowered their prime lending rates (10.75% in October 2009 to 9.5% in March 2010) as well as their rates on mortgage loans.

In the real estate market, the Central Bank stated that “The one category of lending that continued to increase was real estate mortgage loans, as individuals took advantage of lower property prices and reduced rates on new mortgages”. The estimated price of a typical 3-bedroom home declined by 13.6% in 2008 and again by 8.2% in 2009.

Albeit at a slower rate, the Central Bank went on to state that “On a year-on-year basis, the value of mortgage loans outstanding on the books of the main mortgage lending institutions (the commercial banks and trust and mortgage companies) increased by 5.1% in January 2010 compared with 15.8% in January 2009. Meanwhile the number of mortgage approvals has picked up substantially moving from 1,216 in the first half of 2009 to 1,550 in the second half of 2009”.

It would therefore appear that the real estate market, as it has done in the past, is mirroring the performance of the local economy. Its future therefore appears favourable although there could be some hiccups in the future.