The Finance Minister, on several occasions, has pointed out that we need to stimulate the construction sector to in order to revive the fortunes of our economy. One of the most effective ways to achieve this, which has still not been done, is to drop the mortgage rates for low-cost construction to 3.8 per cent.
This was stated as a goal in the budget statement, where it was further discussed that the T&T Mortgage Finance, as well as two other state enterprise companies, would be consolidated into one institution,which would provide these seminal rates for low-cost construction.
Do you know how many people are on the Government's list waiting for housing? The answer is 129,000. With mortgages as low as 3.8 per cent, quite a few of these applicants, who presently cannot afford a mortgage, would now be able to do so. Why hasn't this been done already? If even 20 per cent of these people, or 25,800 people, were to build their new homes, just think about how many jobs this would create for the masons, plumbers, electricians, labourers? What about the revenue generating activity for the gravel pit operators, block manufacturers, hardwares, draughtsmen, as well as for other merchants, such as Standard Distributors and Courts, which would have a ripple effect throughout our economy. Why hasn't this been done already?
However, the last and, inadvertently, most important impact is these cheaper mortgage rates would also cause all the banks to drop their rates significantly lower than at present in order for them to stay competitive. Therefore, a current mortgage of 7.0 per cent would now fall to roughly 5.8 per cent, cutting, say $2,000, off a current monthly mortgage. This will mean many people who would like a slightly more expensive house would also start building 'the house of their dreams. This would have a wide-ranging stimulus effect on our economy.
We don't have to wait for the International Monetary Fund to come in and prescribe actions for us.
These common sense ideas just have to be implemented, but they must be done now while our economy can still be revived. We don't need any more talk Madam PM; now only action counts.
Roger Gordon
Cascade