Tuesday, April 9, 2013

Another Housing Policy That Will Backfire

Persons earning less than $8000 a month to get 0 down 2% interest for homes up to $450K

"Cabinet decided to make it possible for citizens earning less than $8,000 a month to buy their first home, with zero down payment and at a two per cent interest rate for homes up to $450,000."

Unfortunately this is another programme that will backfire. The government has effectively, artificially and arbitrarily increased the floor price of property in Trinidad and Tobago to $450,000. 

Moreover, this policy is going to further inflate property prices by injecting more cheap money into the property market while the supply of homes remain stagnant. Prices will therefore increase correspondingly negating the original intent of the policy.

Read: The Real Reasons Why Real Estate is So Expensive Trinidad & Tobago

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