Part Two | Real Estate Sector Post-Pandemic Recovery Plan
Part One of this article ended on a note of encouragement for the private sector to begin immediately the task of recovering from the almost two-year lockdown of the real estate sector. As a non-essential service under present classifications, agents have been prevented from going out to work. AREA is of the strong opinion that real estate is, however, an essential service since the need for accommodation is vital to us all on the domestic and business levels. The Association has been lobbying the Ministry of Health vigorously to have the sector re-classified as essential in any future crisis situation.
Partnership with Government is essential in the long run, but it would be unwise to wait for that partnership to establish itself. Initiatives must be taken now on a sector-wide scale as well as individual Brokerage/Agent level. That aspect will be dealt with separately with the AREA membership.
So what initiatives can be taken unilaterally, or as a group, in the three categories of action suggested below?
- Joint proactive measures:
• Form strategic alliances with other Associations to pool ideas, efforts, expertise and funds in matters of common interests
• Approach the banking sector as a strong coalition of business interests to lobby for fiscal help for struggling businesses and improved interest rates for startup and renovation loans and major capital projects
• Lobby Government as a strong coalition of tens of thousands of members and interests and business sectors seeking the individual interests of each sector as well as the common good.
- AREA initiatives:
• Provide a platform to promote internal and foreign real estate investment.
• Liaise with exporTT to offer a virtual promotional tour for second home investment
• Reach out to the diaspora in Canada, USA and UK and incentivise them to return home to retire, to buy a vacation home, or simply invest funds as a hedge against local risk.
- Recovery Task Force : Real Estate
As the Incorporated regulatory body of the real estate industry in T&T, AREA Standing Committees have already begun taking steps to ensure a safe return to work.
• Protocols for viewing with clients/buyers | a comprehensive document has been written, circulated to the membership and already implemented.
• Partnerships locally | have already been entered into with other associations and industries to combine expertise, energy and ideas for a stronger approach and lobby of government where their help is essential.
• Partnerships regionally | AREA has recently become a member of the largest real estate association in the world, the National Association of Realtors (NAR) which offers members the possibility of collaborating with realtors in over 100 countries.
• PR effort | is ongoing to strengthen social media platforms and help members to optimize this new way of conducting business and marketing listings
• Media articles | have been and will continue to be written to educate and inform both the public and membership
• Educational courses | continue to be improved and offered to members and the public to keep local standards at international levels. AREA is the only national body able to offer agents a range of accredited professional courses that set them apart from non-members.
• On an individual Agent/Agency basis | guidelines are being perfected to guide members on matters of internal organisation, staffing, public image, PR options, website improvement, ongoing virtual education opportunities and more, all geared to recovery of members from over a year of lockdown.
Where public/private partnership is most needed by the real estate sector is in the matter of FDI promotion. Government bodies tasked with FDI facilitation must step up and take advantage of overtures from investor that in the past have been ignored. This traditional disconnect between government ministries and agencies and the private sector is unproductive and dangerous.
Also needed as an energetic invitation for FDI on the domestic level is the removal or suspension of the Legal Order of Feb 2007 that imposed a licensing regime on all sales of Tobago property to foreign nationals. It is not credible to, on the one hand, invite international visitors to the island, and on the other hand deter all efforts to invest in a vacation home. This type of visitor investment has made other islands vibrant in terms of real estate sales and super-charged their tourism sectors. In T&T we have been on a downward trajectory since 2008 (earlier in Tobago) and stimulating the “villa market” has proved in the past to be extremely effective.
Another signal of encouragement for both domestic and foreign markets is to suspend Stamp Duty for a given period of time to make property purchases more affordable. With sales at such a low point, there would be little loss to the Exchequer initially and a very positive signal to the market. It is important to recognise that when the pandemic took hold in the UK, this was one of the first actions taken by Parliament and the public reacted well to it. Real estate sales boomed.
All these initiatives will only work if there is commitment by the GORTT to identify and support real estate as a significant economic indicator of the prosperity of the country, a key export contributor to GDP, and potentially, a significant earner of foreign exchange when FDI is once more attracted to our shores. The point is that there are options. There are actions that can be taken in the short term that will impact the speed at which real estate regains active status and allows Agents to get back to work And the health of the real estate sector directly impacts so many other down-stream businesses like construction, air-conditioning, landscaping, furnishing, pool construction and maintenance and so much more.
Investment in property is such a timeless, tested way to invest and protect wealth that we have a responsibility in these very unsure times to do everything possible to make property investment easy and desirable once again.