Category: Insights

Following an overall decline of  0.6 per cent in 2015, the Central Bank of Trinidad and Tobago has stated that GDP is estimated to have fallen by 6.7 per cent (year-on-year) in the first half of 2016, led by a contraction in the energy sector (10.8 per cent).  There is some uncertainty regarding the quantum of the decline which was addressed earlier by us and can be found at http://gafarrell.com/how-much-has-the-local-economy-declined-in-2016/.

The contraction in the energy sector was due to falls in both prices and production.  Not only have oil and gas prices fallen dramatically over the last year, but oil production has also declined steadily since late 2006 while natural gas production peaked in late 2009.  The decline has been attributed to three main factors: mature acreage, increased emphasis on safety and infrastructural upgrade.  The decline has also resulted in a 20% decrease in foreign exchange inflow from the energy sector.

This current environment of slowing economic activity has also led to:

• Worsening conditions in the labour market.  The latest data from the CSO indicate that the rate of unemployment increased to 4.4 per cent in the second quarter of 2016 from 3.8 per cent in the first quarter of 2016 and 3.2 per cent in the second quarter of 2015.
• Subdued inflationary pressures. According to the CSOs Index of Retail Prices (RPI), headline inflation on a year-on-year basis measured 3.0 per cent in September 2016, down from 3.5 per cent in April 2016.
• A 6.7% decline in the local stock market over the first nine months ending September 2016.
• A significant drop in the demand for commercial real estate rentals.  It is currently estimated that there are over 300,000 sq. ft. of vacant, commercial office space available for rent in and around Port of Spain.
• The slowing of real estate mortgage lending.  This has been exacerbated by higher interest rates as well as the worsening weaker labour market conditions referred to above.

On the bright side, there are several new energy projects such as the recently commissioned Angostura Phase 3 project by BHP Billiton, bpTT’s Juniper Project and EOG Resources’ Sercan Development.  It is anticipated that these should add a fair amount of natural gas to the local production horizon by early 2017. In addition, OPEC is currently attempting to agree to a decrease in oil output.

It would therefore seem that until such time that there is a recovery in energy prices and local production, the economy, and by extension the real estate market, could be in for a rough period.

Printable Version BUYING A HOME CHART

Questions	Answers for Home #
	1	2	3	4	5
Address
What kind of home is it? (Detached, Townhouse, Condominium)
How old is the home?
How large is the lot? (Small, Medium, Large)
How many bedrooms are there?
How many bathrooms?
Does it have air conditioning?
Does the master bedroom have its own bathroom
Is there –
– A separate dining room?
– A separate family/TV room?
– A patio?
– A garage or carport?
– A security system?
How close is the home to:
– Your work (Close, Average, Far)
– Your spouse’s work
– Public transportation
– Schools
– Shopping Parks/playgrounds
– Recreational facilities
– Place of worship
Other Features – Pool, Water Tanks, etc.

If you would like a hard-copy of the above, please feel free to contact us.

In this post, we list a few of the final steps necessary in buying your home.

1. About 2-3 days before you are scheduled to close on the home you are buying, it is a good idea to do another inspection of the home to ensure that there have been no major changes to it.

2. Make sure you know exactly when and where the closing of the transaction is to take place and try and reach early in case of any queries or unforeseen traffic delays.  Make sure you have any documents, certified cheques, etc. that you have been requested to bring with you.

3. Once the transaction has been closed, there are still some other steps that should be taken as soon as possible.  For a list of these, please feel free to contact us.

This is the final post of our series. We sincerely hope you have enjoyed it and welcome any comments you may have.

Remember, G A Farrell & Associates Ltd. now has a free MAP (Mortgage Assistance Plan) that is available to ALL their clients that require a valuation report to purchase a property.  G A Farrell & Associates Ltd. will offer guidance through the entire process at no charge other than their normal valuation fee.  For further information, please contact us.

Once your loan has been approved, here are some other steps that are now necessary.

1. Assuming you or the Mortgage-Lending-Institution has not done so already, you should now instruct your attorneys to prepare the relevant Deed of Conveyance or Assignment. As mentioned in an earlier post, if the attorney that is preparing your Deed of Conveyance or Assignment is the same one as the bank is using to prepare the Deed of Mortgage, then the fees for the latter will be discounted 50% assuming the property does not fall under the Real Property Act (RPA) formerly Real Property Ordinance (RPO).
   
   The attorneys will ask for several documents and shown below, are the more common ones. Additional documents could be required depending on your circumstances. If you would like a hard-copy of the below list, please feel free to contact us.
   
2. Assuming the property will not be insured under a blanket policy of the Mortgage-Lending-Institution, you should make arrangements to have the building fully insured. In your valuation report, the minimum sum needed for insurance will be indicated. It is a good idea to increase this sum by about 10% to cater for things like inflation during the coming year, professional fees and removal of debris.
   
   The insurance policy will also have to have a special clause in it noting the interest of the Mortgage-Lending-Institution. You do not have to worry as the Insurance Company will be familiar with it. While you do not own the home as yet, the insurance company can start the process of covering you and noting your current interest in the home in case something happens in the interim.
   
   You may want to consider the services of a reputable insurance broker to guide you as to which insurance company to select.
   
3. There are also other things on a personal side that need to be done. For a hard-copy of this list, please feel free to contact us.