reveal real estate

What’s the cheapest real estate you can find in a master planned community in Central America?

December 20th, 2009

central-america-international-real-estate-price-rank-2009

2009 has been a tough year for real estate sellers in Central America. Sales volumes are down, buyers are more risk adverse and financing is tight. The one bright spot is a growing group of ‘lifestyle buyers’ looking for cheap properties and a low cost of living. Many see Central America as an affordable safe haven and a way to side-step the worst effects of an economic downturn at home.

As it’s cheap real estate these lifestyle buyers are after, we thought we’d offer up a resource that highlights the lowest priced real estate in the four countries we follow: Belize, Costa Rica, Panama and Nicaragua.

Not surprisingly, the most affordable way into the market is by purchasing a lot or homesite. Our analysis looks at master planned communities targeting the international buyer. This means that a lot purchase comes with access to community amenities. Swimming pools, clubhouses and fitness centers are the most common. In some of the larger, resort-style communities, you’ll find golf courses, restaurants, shopping centers, racket courts, hotels and marinas.

So what’s the starting price point for lots in master planned communities?

We’ve built a ranking table to answer this question, giving the results in overall price and price/sqft for 2009. The table complements the earlier PriceRank we prepared for single family houses and condos. The columns are sortable letting you organize the list in different ways. If you want to know what amenities are offered by each real estate development, click through to the individual page for the answer. You’ll also see if the amenities are planned or completed.

A quick glance at the table shows two broad themes:

  • Real estate developments located in Nicaragua tend to rank lower (ie are lower in price) than those in Costa Rica, with Belize and Panama falling somewhere in between. This pattern mirrors the level of maturity of the real estate markets - from emerging (Nicaragua) to middle markets (Panama and Belize) to the most mature (Costa Rica). We’ve analysed this before by plotting ‘development curves’ to show the relative levels of each of the markets.
  • Generally speaking ocean property has a premium over other locations. Master planned communities on the ocean rank higher for the most part than lake/river and pastoral locations.

Rank Real estate development Country Location Location type Median price ($) Median price/sqft
1 Camino Del Rio Belize Belmopan Lake/river 20,000 2
2 Lomas de Santa Rosa Costa Rica Tamarindo Pastoral 21,200 6
3 Club Alegria Nicaragua Granada Pastoral 21,500 2
4 Better in Belize Belize Belmopan Lake/river 23,000 1
5 Prana del Sol Nicaragua Tola Ocean 25,000 3
6 Rancho Las Lomas Costa Rica Parrita Ocean 26,500 4
7 Villa Davina Panama David Lake/river 28,400 3
8 Casa Llanta, Nicaragua Nicaragua South of San Juan del Sur Ocean 30,000 1
9 Congo Hills Nicaragua San Juan del Sur Ocean 30,000 3
10 Rancho Los Suenos Panama Espave Pastoral 31,000 2
11 Waterside Belize Flowers Bank Lake/river 31,730 1
12 Progresso Heights Belize Corozal Lake/river 34,816 3
13 Rancho del Oro Nicaragua San Juan del Sur Ocean 35,000 2
14 El Camino del Sol Nicaragua San Juan del Sur Ocean 38,175 5
15 Apanas Lake Estates Nicaragua Matagalpa and Jinotega Lake/river 39,900 2
16 Rancho Papayal Nicaragua San Juan del Sur Ocean 40,000 2
17 La Vista Nicaragua Nicaragua Tola Ocean 40,000 2
18 Consejo Shores Belize Belize Corozal Ocean 42,500 2
19 Seahorse Tropics Nicaragua San Juan del Sur Ocean 44,200 4
20 Villa Lagos Nicaragua Granada Lake/river 45,240 5
21 Parque Maritimo el Coco Nicaragua South of San Juan del Sur Ocean 48,600 7
22 Las Fincas de Escamequita and Las Haciendas Nicaragua South of San Juan del Sur Ocean 49,000 1
23 Belize Reserve Belize Cayo Pastoral 49,950 2
24 Paraiso de Amelia Nicaragua San Juan del Sur Ocean 50,000 4
25 Tamarindo Beach and Ocean Estates Nicaragua Central Pacific Nicaragua Ocean 50,000 5
26 Bella Mar Nica Nicaragua Tola Ocean 52,561 5
27 Cerros Sands Belize Corozal Ocean 53,500 5
28 Dreamscapes Belize Belize Dangriga Ocean 54,111 5
29 Finca Java Nicaragua Matagalpa and Jinotega Lake/river 55,000 0
30 Selva del Mar Nicaragua Tola Ocean 55,000 5
31 Bella Vista Guasacate, Nicaragua Nicaragua Tola Ocean 59,000 12
32 Altos de Maria Panama Chame Highlands 59,100 3
33 Club Vistalagos Nicaragua Laguna de Apoyo Lake/river 64,000 4
34 Cantamar Playa Yankee Nicaragua South of San Juan del Sur Ocean 65,000 4
35 Montanas de Caldera Panama Boquete Highlands 67,500 4
36 Finca del Mar Nicaragua Central Pacific Nicaragua Ocean 70,500 4
37 Hills of Santa Marta Nicaragua Tola Ocean 72,000 6
38 Turtle Cove Lake and Yacht Club Costa Rica Arenal Lake/river 72,720 4
39 El Encanto del Sur Nicaragua San Juan del Sur Ocean 73,500 4
40 Costa Dulce, Nicaragua Nicaragua South of San Juan del Sur Ocean 82,000 6
41 Starfish Reef Panama Bocas del Toro Ocean 84,000 3
42 Hacienda Los Molinos Panama Boquete Highlands 84,660 6
43 Pacific Marlin, Nicaragua Nicaragua San Juan del Sur Ocean 85,000 7
44 El Club del Mar Nicaragua South of San Juan del Sur Ocean 89,000 7
45 Papagayo Golf Lots Costa Rica Playas del Coco Ocean 90,000 1
46 Remanso Beach Resort, Nicaragua Nicaragua South of San Juan del Sur Ocean 92,792 12
47 olcan Springs Ranch Estates Panama Volcan Highlands 97,250 4
48 Bahia Lomas Estates and Marina Panama Bocas del Toro Ocean 98,499 4
49 Balcones de Majagual Nicaragua Marsella / Maderas Ocean 99,000 6
50 Mansions at Banyan Bay Belize Ambergris Caye Ocean 101,000 15
51 Paradise Dreams Panama Bocas del Toro Ocean 103,333 10
52 Boquete Country Club Panama Boquete Highlands 107,189 5
53 Valle Verde Costa Rica Central Valley Highlands 107,685 1
54 Boquete Plantation Panama Boquete Highlands 110,000 7
55 Rio Oria Estates Panama Azueros Peninsula Ocean 112,000 1
56 Cala Azul Nicaragua San Juan del Sur Ocean 117,000 11
57 Orchid Bay Belize Corozal Ocean 119,000 9
58 Finca las Brisas, Costa Rica Costa Rica Nicoya Ocean 120,750 2
59 Montanas y Mar Costa Rica Quepos/Manuel Antonio Ocean 122,500 1
60 Cheetah Chombo Costa Rica Cahuita Ocean 125,500 1
61 Cerro Grande Estates, Costa Rica Costa Rica Tamarindo Ocean 126,250 1
62 Placencia Yacht Club Belize Placencia Ocean 130,000 18
63 Gran Pacifica Nicaragua Central Pacific Nicaragua Ocean 132,665 21
64 Montecristo Beach and Golf Resort Nicaragua Central Pacific Nicaragua Ocean 133,833 10
65 Rancho Santana Nicaragua Tola Ocean 136,750 5
66 Residencial La Esmeralda, Costa Rica Costa Rica Tamarindo Ocean 137,500 4
67 Hacienda Iguana Nicaragua Tola Ocean 140,417 7
68 Tierra Pacifica Costa Rica Playa Junquillal Ocean 145,000 2
69 Sanctuary Bay Estates Belize Belize Stann Creek Ocean 146,500 3
70 Bosques de Vista Marina, Costa Rica Costa Rica Playas del Coco Ocean 150,000 6
71 Playa Santa Rosa Nicaragua Central Pacific Nicaragua Ocean 155,563 13
72 Costa Paraiso Nicaragua South of San Juan del Sur Ocean 159,000 7
73 Rancho Villa Real, Costa Rica Costa Rica Tamarindo Ocean 171,000 3
74 Portasol Costa Rica Dominical Ocean 180,500 2
75 Sittee Point Belize Hopkins Ocean 193,500 13
76 Lobster Cove Panama Chuchecal Bay Ocean 208,750 8
77 Pura Jungla, Costa Rica Costa Rica Paraiso Ocean 209,275 2
78 Lomas del Mar, Costa Rica Costa Rica Playas del Coco Ocean 212,500 3
79 Brisas del Pacifico, Nicaragua Nicaragua San Juan del Sur Ocean 217,174 9
80 Eagles View, Costa Rica Costa Rica Nosara Ocean 224,900 5
81 Valle Escondido Panama Boquete Highlands 227,140 7
82 La Reserva Camaronal, Costa Rica Costa Rica Samara Ocean 233,475 18
83 San Buena Golf Costa Rica Southern Pacific Ocean 234,400 11
84 Ladera del Mar Costa Rica Playas de Coco Ocean 237,000 4
85 Villas Cabo Vela Costa Rica Playa Grande Ocean 247,000 3
86 Sunset Point Bocas Panama Bocas del Toro Ocean 255,000 10
87 Manuel Antonio Estates Costa Rica Quepos/Manuel Antonio Ocean 284,000 5
88 Cabo Caletas Costa Rica Costa Rica Esterillos Ocean 285,000 18
89 Cocoplum Belize Belize Placencia Ocean 305,250 11
90 Sonidos del Mar, Costa Rica Costa Rica Nosara Ocean 306,667 28
91 Coco Bay Estates Costa Rica Playas del Coco Ocean 311,250 12
92 Balcones del Lago Arenal Costa Rica Arenal Lake/river 315,000 4
93 Rancho Playa Negras Costa Rica Playa Negra Ocean 337,112 22
94 Lora Hills Costa Rica Costa Rica Playa Ostional Ocean 498,877 11
95 Hermosa Heights Costa Rica Playa Hermosa Ocean 565,000 48
96 The Four Seasons Papagayo Peninsula Costa Rica Papagayo Ocean 950,000 31
97 Hacienda Pinilla Costa Rica Tamarindo Ocean 970,983 45
98 Isla Viveros Panama Panama Isla Viveros (Pearl Island) Ocean 993,866 18

We’re continuing to sort through the data we collect, looking for the best ways to present and dig out the facts. We’d love to have your ideas and suggestions. They’ll be more price rankings to follow. We also plan a “Master Plan Completion Index” to give a sense of how far along real estate developments are with their master plan - a piece of information that savvy real estate investors should follow with care.

Stay tuned by subscribing to updates.

From Reveal Real Estate - charting overseas property trends in Central America.

Comparison shopping: An analysis of purchasing destinations for Nicaragua real estate

July 14th, 2009

Nicaragua property trends 2008 to 2009

The Nicaragua real estate market is hard to generalize on a national level. It’s made up of many micro or sub-markets.  In this article we deep-dive into some of Nicaragua’s most important sub-markets or ‘purchasing destinations’ to draw out the kind of data we hope will help buyers and sellers make more educated decisions.

nicaragua-real-estate-by-areaIn Nicaragua the main purchasing destinations are located on the south western part of the Pacific coast.  In particular the town of San Juan del Sur, the area south of San Juan del Sur to the border with Costa Rica, the Tola Rivieria & Popoyo region and the Central Pacific Coast, due west of the capital, Managua.

Together these four areas have 80% of all overseas property developments in Nicaragua catering to the international buyer, making them a logical basis for comparison.

Mingle enough with real estate investors in Nicaragua and you’ll hear them expounding on the relative merits of different areas and asking questions like:  “Is the town of San Juan del Sur with its local cafes, bars and restaurants a good place to invest.  Or is Tola with its master planned resort-style communities a better option?”

Ranking purchasing destinations by price

nicaragua-property-hotspot-mediansThe Central Pacific Coast of Nicaragua tops the list for median price/sqft for both serviced lots ($11.75/sqft) and condos ($206.30/sqft). Several large scale resort communities are planned in this area, including 3 championship golf courses.

The area South of San Juan del Sur, towards Costa Rica is the most expensive for single family houses ($173.03/sqft), followed by Tola Riviera & Popoyo ($164.78/sqft).

San Juan del Sur receives the most press and has the most international tourist visitors.  But it is not the most expensive purchasing destination for any property category. (It comes a close second for condos.)

San Juan del Sur has certainly seen a rush of development in recent years and is home to 1/3 of all real estate projects in Nicaragua focused on the international market.  Perhaps developers have been doing the math on buying a lot in the San Juan del Sur area (5th most expensive location) and developing this into condos (2nd most expensive location).

What about trends over time for San Juan del Sur?

The median price for lots, condos and single family homes has fallen in San Juan del Sur by more than the average across the country. For lots, the overall fall in median price between 2008-9 for the country was -3.53% (in San Juan del Sur the median price fell -9.38%), for condos the overall fall was -6.40% (in San Juan del Sur the drop was -9.90%) and for houses -3.41% for the country compared to -11.98% in San Juan del Sur.

Some buyers will see this as a clear buying opportunity given San Juan del Sur’s continuing status as the pivotal center for Nicaragua property. Others a sign of over-supply.  What do you think? Let us know in the comments below this post, or leave a review for San Juan del Sur.

From Reveal Real Estate - charting overseas property trends in Central America.

Risk and reward for real estate in Central America

March 21st, 2007

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.  A good way to envisage this is by considering the ‘development curve’ that emerging real estate markets pass through as they mature.

Central America real estate risk reward by country 

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. 

From Reveal Real Estate - charting overseas property trends in Central America.

Don’t assume you can finance your real estate purchase

January 14th, 2007

In many Central American countries it can be very hard to obtain a loan from a local bank for real estate investing and, where it is possible, the interest rates are not competitive to the US and terms can be unfavorable. 

Panama stands out in this regard as competitive financing is comparatively easy to obtain.   In most countries you can normally find private lenders offering loans based on refinancing US assets and an ever increasing number of developers are offering owner/developer financing although this number is still small in absolute terms.

From Reveal Real Estate - charting overseas property trends in Central America.

Real estate and tourism are inexorably linked

January 10th, 2007

Tourism trends are useful predictors of real estate sales.  This is particularly the case where tourists and real estate investors are both traveling a long distance from their primary residence and staying for an extended period of time. Of course, a second home purchase is a larger discretionary payment than a vacation with many more factors needing to be taken into account.  But at a general level there is considerable overlap in the attributes that second home buyers and holiday makers are looking for.

You know how it goes.  You go on holiday.   You find a charming little fishing village and spend two glorious weeks relaxing and doing fun stuff.  On the last day you look at realtors window and then buy a property or at least start looking.  Real estate and tourism are inexorably linked.

We are seeing this phenomenon all over Central America.  Key tourism areas are also those generating the highest levels of real estate activity.  Examples are Granada and San Juan del Sur in Nicaragua; Ambergris Caye in Belize, Antigua in Guatemala, the Bay Islands in Honduras and Bocas del Toro, Panama City and Boquete in Panama.

Given this link, how Central America is positioned within wider international tourism trends provides a key indicator for the real estate market going forward.

The prospects look good:  According to the UNWTO, at 16% growth, Central America was the fastest growing sub region for tourism in the world in 2005.  2006 has also seen double digit increases for all Central American countries, with the exception of Belize.  The area is clearly growing in importance as a crowd-puller for holidaymakers.

Anyone for fractional real estate in Central America?

January 9th, 2007

It isn’t easy to find fractional real estate for sale in Central America.  Not right now.   But the market is steadily evolving and fractionals are destined to become a hot trend in future years particularly in the vacation home sector. 

For fractional buyers it is often not a matter of being unable to afford a vacation home, but a case of not wanting the hassle and expense of maintaining a home 52 weeks of the year when they are likely to occupy it only for two or three weeks each year.  It is simply a matter of cost-justifying the limited use of their home, especially if they have multiple second home/vacation properties. 

At the same time, buyers do not want to compromise on questions of value, equity and other benefits of second-home ownership.  That is why, unlike time share, the fractional real estate product has evolved to include fee simple deeded ownership complete with title insurance.  This ownership can be passed down through the generations in perpetuity or resold in the same way as general real estate.  

The key to the success of fractionals is their professional management. Most are operated by well-respected hospitality companies known worldwide. Among them are Ritz Carlton, Four Seasons, Starwood, Intrawest and Millennium, brands known for their five-star services and amenities. Part of the appeal of fractionals is that they are completely hassle free. To date there have been very few fractional resort developments in Central America positioned at the luxury end of the market (with the notable exception of the Four Seasons at Papagayo in Costa Rica).  

We are still at the beginning of it all in Central America.   And fractional real estate products are just one example of more sophisticated product offerings that are beginning to emerge in Central America.   Have a look at the Ground Floor for a broader discussion of fractionals alongside destination clubs and condo hotels.

At what stage of a “development curve” are we investing?

January 2nd, 2007

Emerging real estate markets tend to follow an S shaped development curve. Knowing where on the curve a particular market is helps you to decide whether the risk/reward profile is right for you. At the top of the curve lie the more ‘mature’ markets with more speculative or ‘pioneer’ markets found at earlier stages.

Markets early in the curve tend to be good candidates for short term capital appreciation. But inherent risks are high and infrastructure quality tends to be low. More mature markets, located at later stages in the development curve, have a lower risk environment based typically on an established tourism (and retirement) market and strong sense of economic and political stability. Strong rental possibilities exist in property hot spots and luxury (often branded) offerings can be found on the market. Middle markets fall somewhere in between - not really emerging but also not quite fully developed.

Real estate development curves

We plan to plot counties in Central America on this graph and also dig deeper into individual regions. There may be instances that a property hot spot in a particular country has the characteristics of a ‘mature’ destination while the county as a whole appears to have ‘pioneer’ attributes. We have our ideas but would be interested in your thoughts on where you would place different counties and regions on a development curve such as this one. It is also possible to draw some general conclusions on the main types of buyers active at different stages on a development curve for Central America.

From Reveal Real Estate - charting overseas property trends in Central America.

Who is buying property in Central America?

January 2nd, 2007

There has been a trend in recent years for many North American and European buyers to purchase real estate in what are seen as developing or emerging economies. In Europe much of the focus has been on the emerging economies of the former Soviet Union as well as Morocco and southern Europe. In North America the focus has been very strongly on the Caribbean, Central and Latin America. The US State Department estimates that about 380,000 Social Security cheques are delivered to beneficiaries outside the US each month. Almost four million Americans, not including embassy officials and the military, are now living overseas.

Many Central American countries offer impressive incentive packages for retirees. Coley Huggins describes the economic benefit of a retiree migration to Central America as a two way street. “Retirees get a lower cost of living, warm weather and cheap[er] housing and create a virtuous cycle in return: more retirees equals more local jobs, resulting in more economic stability and less political stability, resulting in more retirees”

A buyer typology prepared by Coldwell Banker Nicaragua Real Estate

Speculators / investors - a buyer group interested in making the most money on a minimum investment. They tend to buy lots/raw land early on in the real estate growth cycle of a developing country before prices rise as amenities are built, buying community grows and turnkey products begin to be offered. Many never build and most are interested in future, short to medium term resale of investment for a substantial profit to offset the risk of early investment.

Second home investors - a buyer group interested mainly in the rental income return of turnkey or built properties. They need to be convinced of the potential for rental income and so are focused on issues such as tourism growth, rate of sale of surrounding properties, access to amenities for potential renters, security and safety aspects. Condominiums, townhouses, house/land packages are popular with this grouping. The setting in which the home exists (ie its surroundings) is also a primary consideration. Many young professionals or entrepreneurs fall into this buying type.

Second home users - a buyer group focused mainly on personal use of the property they purchase. They are usually already affluent and own more than one home, often in different parts of the world. They are interested in escaping harsh climates for all or part of the year and want seasonal/vacation homes where the lifestyle and amenities/activities contrast with their primary residence. They generally do not rent their property and purchase lots/land in anticipation of future building or condominiums where available. A lifestyle, a sense of community and feeling of belonging, privacy and security are important to this group.

Retirement and pre-retirement buyers - These buyers are typically 5-6 years from retirement and are quite similar in overall characteristics to the second home user category. They do however, have more of an emphasis on the issues of security, availability of health facilities, access and proximity to urban centres. Privacy is less of a concern as many are interested in building new relationships and being part of a community. Typically have purchased lots but with the growth in turnkey product this profile is changing. They are often downsizing from larger family homes in country of origin and cost is a key consideration in any purchase.

Not for Uncle Sam buyers - this buying group cross-cuts the other groups and is characterised by a desire to ensure that they profit from investments outside their home country and these profits are not always repatriated to their home country. They are often interested in the freedom from restrictions (financial and otherwise) offered by many developing countries. As such their key focus is on price point and resale opportunities whilst buying something they can enjoy in the here and now.

Commercial investors - This final group is motivated by the return on capital invested and invests at a larger scale than the above groups and, generally, for the longer term. The type of commercial investor entering the market will vary greatly depending on the perceived maturity and stability of the real estate market in general and the wider legal, political and economic investment environment.

Changes in buyer profile for markets at different positions on a development curve

An understanding of the changes in buyer profiles over time can give an indication as to where buyers for different markets in Central America will come from in the future. The graph below considers the buyer characteristics at different stages in a development curve. Speculators make up the bulk of investors in markets at earlier stages with second home and retirement buyers representing a second and third wave of investing as markets develop and mature.

Real estate buyer profiles in emerging markets

Is Belize ‘the next big thing’ in Caribbean real estate?

December 7th, 2006

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. More Belize real estate indicators.

From Reveal Real Estate - charting overseas property trends in Central America.

Guegue.com Web Hosting and Development