Residential Rental Insights: Trinidad & Tobago
Before 2014, the middle to high-end residential rental market was influenced mainly by expatriate rentals, generally quoted, leased and paid in US dollars. With the exodus of multi-national petrochemical companies and downstream energy companies, the landscape of this segment changed.
Due to some landlords of domestic rentals advertising and renting on their own, all transactions are not captured by the real estate agents or agencies in the rental market. However, the forces at play in the middle to upper rental market are significant and telling.
Based on our analysis below, over the last 5 years, the composition of types of property and price ranges in this segment has changed. In this new environment, the demand for units above TTD$10,000 declined, from 2014 to today. Consequently, there has been an upsurge in residential rentals below the TTD$10,000 threshold; which accounted for less than 20% of market transactions in 2014 to over 60% by 2018.
To clarify, this is not a reflection of in an increase in supply but rather a decrease in price for the same units over the years. During the period 2014 to 2018, landlords and owners have incrementally reduced rental prices to accommodate decreasing budgets and to get their properties occupied. For example, a unit which may have rented for USD$3,000 in 2013 to 2014 could be rented for TTD$10,000 today, resulting in a reduction of approximately 50% in just 5 years.
Additionally, where prices for middle to upper end rentals were once quoted in US dollars, the shortage of foreign exchange in our economy has precipitated a shift where rental properties listed on the market today are predominantly in TT dollars.
Rentals over TTD$30,000 and TTD$40,000 combined amounted for almost 19% of market transactions…
Concurrently, rentals over TTD$10,000 have decreased year on year over the period 2014 to 2018, with more extreme decreases where the price bracket is greater. Rentals of this standard are still available but the demand has dwindled considerably. Rentals over TTD$30,000 and TTD$40,000 combined amounted for almost 19% of market transactions in 2014 and reduced to less than 2% by 2018.
Moreover, our analysis illustrates an overall increase in popularity in rentals of apartments and townhouses over houses. The decline of house rentals occurred around the same time of the decrease in rental prices below TTD$10,000. Therefore, we can conclude that in this price bracket, apartments and townhouses are more readily available than houses. This directly correlates to the upsurge in demand for rentals below TTD$10,000.