Thursday 21st April 2005

 

High cost of land leaves

Tobagonians feeling the pinch

 
 
 
 
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BY ASHA JAVEED

Tobago’s land is a gold mine. It’s so valuable that it’s beyond the reach of most Tobagonians. Property value has shot up in the last six years with land being retailed for as much as $80 a square foot. There has been a concentration of development on the Leewards side of the island, but more centred on the coast.

While it means a plethora of villas, hotels, gated communities and guest houses for the sister isle, locals are feeling the pinch. Owning property on their own island has become difficult for some, while others have to shell out the same amount as any investor to acquire a piece of land.

“You’ll hardly get land for $10 a square foot anymore. In Bon Accord, it goes for about $80 a square foot and in Crown Point, about $100,” said local land evaluator Ronald Leslie.

“It’s all about demand and supply and there’s only so much land available so it has to become expensive,” said Rene Seepersadsingh, president of the Tobago Hoteliers Association.

To stem the inflow of foreign owners and private investments, the Tobago House of Assembly (THA) has started to buy prime property for residential purposes.

At a recent luncheon at the T&T Chamber of Commerce, THA Chief Secretary Orville London said Tobago’s recent $90 million acquisition of the 350-acre Courland Estate was to develop housing for the local community.

While London has not expanded on his plans for the estate, land evaluator David Knott believes it is a tremendous opportunity for a resort investment.

“If the THA decides they are going to remove assets from the market, they have to explain what they are going to do with it,” said Knott.

The THA has also been negotiating with the Ansa McAl group to acquire Pigeon Point at a price set by independent evaluators.

It is expected to cost the THA about $200 million.

Janet Arnold, president of the Tobago Chamber of Commerce, said the THA had to step in to ensure that Tobagonians were provided with affordable homes.

“The average person in Tobago cannot buy land,” she stated.

The THA already has National Housing Authority schemes at Calder Hill, Signal Hall, Canaan/Bon Accord and Speyside to provide homes for Tobagonians.

“The THA is one of the biggest landowners in Tobago and owns most of the estates along the Atlantic coastline. They should look at ways those lands should be used to benefit the population rather that tell Tobagonians who to sell their land to,” said Knott.

Knott echoed the views of Arnold and Seepersadsingh for the THA to revisit the Foreign Investment Act of 1990 and develop a land policy.

He pointed out that a foreign investor can acquire land not exceeding five acres for the purposes of trade or business without obtaining a licence. Knott added that foreigners can acquire land which does not exceed one acre for residential purposes.

He said the THA should take the lead and go “to the guts of the island” and make it a vigorous component of the economy.

“This is an open market and the value is based on what foreign investment has done to the island. And this included speculators from Trinidad who have the money and who purchase property to sell again. From what I’m seeing there’s a lot of that going on,” said Leslie.

Knott said Trinidadians are the ones sending up the value of Tobago land by buying up property.

Residential land in Scarborough and southwest of Tobago is getting scarce. He explained that prices have gone up because people are willing to pay for it.

“When demand increased, the price increased and property is still being sold because people want to buy it. And it’s not foreigners, it’s Trinidadians,” he explained.

He pointed out the T&T economy has been buoyant and people with money were investing in real estate.

“The prices are lower than in Trinidad right now, so it’s a bargain for them,” he said.

While the demand may limit the land available for people in Tobago, for every buyer there is a someone ready to sell, Knott pointed out.

“The development in Tobago is now residential sub-divisions in certain specific areas and gated premises where people enjoy a better clientele. In order to command a certain clientele, you get a piece of land, develop it and gate it.

“It means, therefore, there are certain type of people you are looking for to live there. In order to have that type of security, you have to pay for it. Those retail for about $5 million,” said Leslie.

Leslie noted that high property prices have led to an increase in the island’s cost of living.

“And prices keep going up because every time something happens in Trinidad, like recent vegetable shortage, you feel the brunt of it in Tobago,” he said.

Seepersadsingh said everything costs 20 per cent more in Tobago than it is in Trinidad.

Comparatively, it is significantly lower than the other Caribbean islands, he said.

It’s hoteliers who feel the brunt of it when investors capitalise on the local market by setting up guesthouses and renting to foreigners.

“People come here and build guest houses and they are not following the law, not registering their properties and not paying proper taxes,” he explained.

This is leading to a “watered down” industry which will put pressure on the existing infrastructure.

“What infrastructure is in place? The Government has not accepted the responsibility and I am not satisfied the infrastructure can accommodate any increase. Everything is being built but can the existing infrastructure support the housing spurt? The State cannot give that kind of insurance to investors,” he said.

Seepersadsingh said one has to be cautious not to overdevelop the island with guesthouses and rooms because it was only just recovering from the bad period after September 11.

He said Tobago was also able to capitalise on the tsunami disaster in Asia as it’s now seen as a safer alternative.

 

 

 

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