It is likely that property prices in the real estate market may not rise much further in the future, says Sally Singh, president of the Association of Real Estate Agents (AREA).
“The market is still experiencing high levels of sales and rentals. If prices are not going to be sustained what we as real estate agents have to do is look at the demand and supply in the market. We will have to adjust accordingly. We as agents do not set the prices, we sell properties, we rent properties, we lease properties. Of course, it is easier to adjust upwards, than downwards. That is why we have regular meetings and try to keep our members updated on all the economic and social issues that are involved and everything else that is relevant to our industry,” she said.
Singh referred to University of the West (UWI) economist Dr Roger Hosein, who said at an AREA seminar last month that current real estate prices cannot be sustained and that past prices were based on an environment where oil prices were much higher.
She continued by saying that based on what Hosein said, house prices and prices in the real estate market are not likely to rise further.
In her opinion, the group that has been hit by high property prices is the middle-income group.
“The sector that has been neglected the most is the middle class. They fall in a bracket where they do not have the income facilities to access and they cannot afford the upper end of the housing market and they are not given the sort of the incentives for there. On the other hand, the lower income sector has access to the Housing Development Corporation (HDC) programmes. It is very difficult for a young professional couple to get anything under $1 million. That is a challenge. They may have to depend on their parents or other means to assist them,” she said.
She also said that when one wealthy investor buys property and then sells at much higher prices it drives up prices and distorts the market.
“In the economy and the market there are a lot of investors who can afford to purchase property and speculate. So you would have someone with the capacity to buy ten houses pre-construction at a ‘reasonable’ price and this distorts the market as those prices are not ‘reasonable’ to the lower income groups. That is just one of the many reasons why the price of properties is so high,” she said.
Singh spoke to the Business Guardian at its Port-of-Spain Bureau two Tuesdays ago.
She was elected as president in May and will serve for a year. She replaced Mark Edgehill.
Increasing membership
Singh spoke about how the industry has evolved over the last few decades.
“We came about as there was a need for professionalism in the real estate industry. In the 1960s, there were not many real estate agents and there were probably about five in Port-of-Spain and even less in San Fernando. During the 1970s more people started to earn more income. With the oil boom came a greater demand for housing and more agents arose. The problem is that everyone operated with different guidelines and confusion arose. Many agents were not doing justice and doing what they should have been doing.
“By 1990 a group of brokers got together and decided it was time to have standards and professionalism. When AREA started there were about eight broker members and 25 salespeople. Now we have grown to 58 brokers, 30 sale agents and 15 corporate associate. The corporate associates would be like bankers and valuators, people who are associated with the real estate industry.”
One of the main issues the AREA has to deal with are agents who do not abide by industry standards.
She also explained that many agents are not even part of the association.
“Only about 20 per cent of real estate agents right now are members of the association. One of my main goals is to have more agents and brokers as part of the association. This would enhance the level of professionalism in the industry. When everyone is guided by ethical rules and guidelines the public would benefit from it.
“A lot of it has to do with the nature of the society with people getting away without having to operate with any guidelines. I think agents being part of the association should be mandatory. It is a modern society. Getting a home is one of the biggest investments a person makes and you need to have that person give you the right advice. We do not want people in this for the short term and just for the commission. We want people guided by deeper principles.”
Real estate legislation
Singh said legislation is important and AREA wants to promote the Real Estate Professional Bill of 2015.
“Currently we are working on submitting the bill. We have approached the Minister of Trade and plan to have further discussions with him with respect to piloting the bill in Parliament. Another challenge we face is compliance with anti-money laundering legislation and collaboration with the Financial Intelligence Unit (FIU). Our proposed legislation will help to reduce the opportunities for any real estate agents to handle transactions in an unethical manner. This, in turn, will deter the potential money launderer from attempting to use property as a means of laundering funds. Certainly AREA has been very successful in helping its members to meet their individual challenges of compliance with the FIU regulations and this is gratifying for us,” she said.
She added that the legislation would “strongly encourage” agents to be members of the AREA.
“That would boost the membership. We would have to follow guidelines such as to become an agent you must have basic qualifications, do certain courses, continuous education programmes. This exists in all other professions. We have been getting the support from agencies like the FIU. We agents from AREA are not only area agents but once you are operating in the real estate industry, you should be registered with the FIU. “
She admits that there are some agents “operating under the radar” and are not registered with the FIU.
“You can check on the FIU Web site. It will show you how many agents are registered. But there are also many agents who are not registered. Real estate is one of the biggest money laundering avenues. That is why we want to increase our membership so people would be guided and trained to be professionals.”
She said AREA has its own disciplinary committee where it deals with members.
Regulating prices
She also spoke about educating members of the public about purchasing a home and other details related to the real estate industry.
“We want to get the relevant information out there pertaining to the association so people could be guided accordingly.”
She spoke about the need for more data in the association and the real estate industry.
“You need data so you would be able to properly price the property. One of the things we face in the industry is that sometimes it seems that people just wake up one day and they decide to set a price. So if you have to insert data that you sold a property in Port-of-Spain for a certain price where the square footage is at, then the price would be standardised and there would be little variation in what prices are. So the agent would be guided by a certain figure, the owner or land lord would also have to accept these figures as it is the norm at the going rate. If there is no data then anything can happen,” she said.
Singh said a proper data base and standardised pricing would not only help the real estate agents but it would also help valuators, the Government and all stockholders in the industry.
“You can go on the US real estate Web site Zillow and get figures of a property on a specific street for a three- bedroom house and it is very precise. We have nothing near that in T&T. Right now we have multi-listing system but we have something in the works which would enhance what we are doing and we will give details about later on. This would really assist us.”
About Sally Singh
Sally Singh is a broker at S2 Real Estate Services and has had in excess of ten years’ experience in the real estate industry.
Singh was elected to AREA’s board of directors on April 29, 2013, became vice president on May 12, 2014 and was elected president of the association on May 12, 2015.
Singh is a graduate of the University of the West Indies where she holds a Masters in International Relations and a BSc in History. She also has a diploma in marketing from the Jamaica Institute of Management and Certificates in Principles of Real Estate Sales and Real Estate Valuation and is currently pursuing a diploma in real estate brokerage, which is being offered at Roytec in collaboration with the Association of Real Estate Agents.
