Belize offers some of the most affordable Carribean real estate in the region.  And some of the properties for sale are magnificent.  Have a look at this private island for $650,000.

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Central America continues to attract investors and tourists alike.  But not all countries have the same pulling power. 

The graph below shows which countries rack up the highest number of searches for real estate online based on the generic country-followed-by-real-estate search phrase.  As you can see, there are more searches made for “costa rica real estate” than for “el salvador real estate.”  And every day the search term ”belize real estate” is typed into search engines more times than “guatemala real estate.”

The results that underpin the graph above are for July 07.  But the trends have stayed the same for a number of years.  Perhaps we will see the numbers of searches for “Panama real estate” and “Belize real estate” catch up with “Costa Rica real estate.”  At the moment though, Costa Rica is the leader for real estate searching online.

The real estate opportunities available in Central America span a range of risk / reward profiles.  There is real estate on offer to suit different investment goals.  Properties that are good candidates for short term capital appreciation exist as well as properties in lower risk environments with the promise of an immediate rental income. 

Of course there are markets within markets so the graphic provides only a general representation of relative position of the country as a whole. The Costa Rica real estate market is the most mature, Panama and Belize real estate represent classic middle markets - not quite emerging and not quite developed - with Nicaragua, Honduras, El Salvador and Guatemala at earlier stages of the development curve.  We plan to dig a little deeper and highlight the relative positions and profile of different real estate areas within each country.  More on this to follow…

National real estate associations exist for most counties in Central America.  And, given the sharp growth of real estate investment in the region, these bodies seem to be getting more active. There are some big ticket items on the table not least the question of licencing, code of ethics and ultimately (maybe) development of an MLS.   The associations are as follows:

• The Costa Rica Chamber of Real Estate (CCCBR), Costa Rica Global Association of REALTORS® (CRGAR),
• Camara Salvadoreña de Bienes Raíces (CSBR),
• Asociacion Nacional de Agencias de Bienes Raíces de Honduras (ANABIR),
• Camara Nicaraguense de Corredores de Bienes Raíces (CNCBR),
• Asociacion Panamena de Corredores y Promotores de Bienes Raices (ACOBIR),
• Camara de Corredores de Bienes Raices de Guatemala (CCBRG)
• Association of Real Estate Brokers of Belize
• Federation of Real Estate Associations of Central America and the Caribbean (FeCePAC) - an umbrella organisation that ties the other bodies together with a focus on integration and networking.

The recent activity is a good sign.  The FeCePAC and CNCBR conference held in Managua, Nicaragua last week had a strong turnout with some key action steps to take for more regional integration of real estate approaches and standards.  We were also pleased to see the recent announcement that the Association of Real Estate Brokers of Belize will be working together with the government to establish a code of conduct and general property industry standards.   The US National Association of Realtors (NAR) currently has bilateral agreements with real estate associations in Costa Rica, El Salvador, and Panama and is affiliated with the Federation of Real Estate Associations of Central America.

A recent profitability report released by Amerblamb concludes that the Belize real estate market will be a slow burner in 2007. 

To quote the report:   “To us Belize is a dichotomy, on the one hand it has everything going for it - for example it’s stunningly beautiful, it’s a former British colony where English is still spoken and where the legal and political systems are still based on their British equivalents and are transparent, it is politically and economically stable, property prices are relatively cheap, the cost of living is low and transport links to North America are good.  But on the other hand Belize is not achieving its potential as a major tourism destination, its not managing to attract enough retires or wealthy expatriates despite various highly attractive tax sheltering incentives and as a result its property market isn’t nearly as exciting as it could be.  Maybe we’re being too hard on Belize, but really we had hoped for more and going in to 2007 Belize real estate profitability and the prospects for the entire property market are okay but less than thrilling. ” Click here to read full report.

We agree that the Government in Belize could be doing much more to promote tourism.  After all, the tourist trade generates over 80% of tax revenues for the country.  After a series of somewhat hasty tax rises over the past year, it seems that the Government is now beginning to take a more long sighted position.  The reversal of the 15% stamp duty tax back to 5% for example is a sign that things are moving again in the right direction. The positive effects of this reversal are beginning to be felt in the real estate market but are likely to filter through more strongly towards the end of 2007.  It is not only tourism that is driving the real estate market in Belize - a large number of investors are buying for future retirement.  Belize stands out in this regard as you don’t have to scrimp on amenities and infrastructure quality to get an affordable property, as can be the case elsewhere in the region. 

Belize is managing to combine the opportunity for investors to participate in both a rapidly growing tourism market and an emerging second home retirement destination. Although more affordable than other Caribbean destinations, this is not at the expense of local amenities and services something that sets it apart from more speculative offerings elsewhere. Certain regions could be described as a “mezzo market” - a term coined by International Living to describe markets that are not quite emerging; not quite developed. The risk/reward profile is perhaps more comfortable than purely speculative real estate markets elsewhere in Central America.

As you might expect, continued growth in tourism, environmental preservation and infrastructure improvement are important factors in the future success of the real estate market in Belize. Indications are good. The country has a progressive Tourism ministry that has been successful in putting Belize firmly on the map as a tourism destination. As the 2005 Moon Handbook puts it, ‘Belize is the only country within the Caribbean to experience consistent increases with respect to overall tourist arrivals since 1998.’ This reach is expanding into the luxury end of tourism, a trend helped by a number of celebrity real estate purchases in the country. We will shortly be reviewing tourism data for 2006 which will help put the trends into context.