Panama property: doing better than many markets, but not immune to the global downturn
July 26th, 2009
The Panama property market is changing. Yes, list prices for real estate in resort communities, condo towers and gated developments in Panama are falling for the first time since the boom. But before we get caught up in the gloom, the good news is the falls are smaller than those we’re getting used to seeing elsewhere in global property markets.
The picture in 2009
The chart provides a snapshot of where things stand in 2009.
- By price per square foot, beachfront condos top the list at $253. But in terms of overall price, ocean view houses rank as the most expensive property type with a median price of $624,600.
- 5 property categories break the $200 per sqft price point: beachfront condos, ocean view condos, urban view condos, ocean view houses and water view houses.
- Of the 10 most expensive real estate developments catering to international buyers, 9 are located in Panama City. Donald Trump’s Ocean Club tops the list with a median price per/sqft of $483 for remaining apartments (see below).
Comparing with prices in 2008
Panama real estate prices have fallen since 2008 but the falls are relatively small when compared with other markets around the world. The median price per square foot has declined 3.55% for serviced lots, 2.02% for condos and 6.8% for single family houses between 2008 and 2009.
Panama is certainly not immune to the global economic downturn. You just have to look at the fall in GDP growth rate from 11.7% in 2007, to 8.3% in 2008 to a predicted 3% in 2009. But the country is still beating regional averages across a range of economic indicators and many remain optimistic about the country’s ability to ride out the economic difficulties, particularly with recently elected President Martinelli at the helm.
It’s a new market in Panama
Things may still get worse before they get better. Local developers and real estate agents are warning about project delays and closures. In areas where a high level of sales have been made pre-construction (such as Panama apartments in Panama City) more price falls are expected as buyers default on their payments. And resale prices are already significantly undercutting developer-direct prices in many areas.
Sellers, used to riding the long boom years, are slowing coming round to the fact that it’s a new market in Panama.
From Reveal Real Estate - charting overseas property trends in Central America.
Tags: Panama, Panama apartment
Posted in Market statistics and data | 1 Comment »
Comparison shopping: An analysis of purchasing destinations for Nicaragua real estate
July 14th, 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.
In 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
The 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.
We’ve just compiled Nicaragua real estate market statistics for 2009 and compared this against our 2008 data. With price falls across the main real estate categories, it’s clear that Nicaragua is not immune to the global contagion of sliding property markets.
The numbers that tell the story
The table below sets out the change in median price for Nicaragua real estate developments since 2008. To ensure that we are comparing like with like, the data aggregates prices for the same property category within each development for both 2008 and 2009. So if a project offered beachfront condos in 2008, but not in 2009, the data was not included in our comparison.
Median asking prices in real estate developments that target the international buyer have fallen 3.53% for serviced lots, 6.40% for condos and 3.41% for single family homes since 2008.
Looking deeper into the numbers, we found that ocean view condos showed the largest fall in median price at 13.62%, followed by long ocean view houses with a drop in median price of 7.55%.
Beachfront property held its own relatively well against the other property types. In call cases (lots, condos and houses) beach front property fell by less than ocean view property.
Not immune
Nicaragua, is clearly feeling the pinch of the slowing global economy. The falling GDP real growth rate from 3.8% in 2007 to 2% in 2008 (according to the CIA Word Factbook) paints the picture for the local economy. But the biggest factor at play in the international real estate space is the fall-off in demand from the US, Canada and, to some extent, European countries. Many of these buyers no longer have access to the necessary capital (be it from investment portfolios or built-up equity in their properties at home) to purchase a property abroad.
But, despite the darkening economic mood, Nicaragua property is not experiencing the double digit drops we’ve seen in markets elsewhere. One of the reason for this is the low levels of lender mediated activity in Nicaragua, making the real estate market stickier. There could be some pockets of finance-driven speculation, but the broad foreclosure waves as experienced in the US are not a factor. Another reason could be the low cost of living possible in Nicaragua. This is attracting a particular type of ‘lifestyle purchaser’ looking for a more affordable retirement.
The upshot for investors
All-in-all if you’re a buyer looking at Nicaragua, you’re in the driving seat. The factors you’d expect from a buyer’s market are present: developers are offering incentives, charter programs, package deals, heavy discounts for cash buyers, extended financing and so on. In fact, if you negotiate hard enough, you may get an overseas property deal of a lifetime.
From Reveal Real Estate - charting overseas property trends in Central America.
Tags: Nicaragua
Posted in International real estate outlook, Market statistics and data, Property news | 3 Comments »
The state of the real estate market in Nicaragua 2009
June 27th, 2009
Investors looking at Nicaragua property need good data to make good decisions. Until now, finding this data has been quite difficult. There are no centrally held databases collecting market data and no Multiple Listing System (MLS).
Our goal at Reveal Real Estate is to plug this information gap. We aggregate asking prices from real estate developments that target the international buyer and put this information online. It’s the next best thing to a functioning MLS or centralized database. Learn more about our data.
2009 Nicaragua property price report
The table looks at property in real estate developments - effectively the luxury end of the Nicaragua real estate market.
Most of the developments are located in key ‘purchasing destinations’ or property hotspots such as San Juan del Sur, Tola Rivieria, and the Central Coast, offering close acccess to surf breaks, swimming beaches and other tourism attractions.
Beachfront condos registered the highest median price in 2009 - But when looking at price per square foot, ocean view condos come in as more expensive. The only two property categories to have a median price/sqft greater than $200 are beachfront condos and ocean view condos.
Long ocean view lots have a median price/sqft of $4.11 - This is lower than the median price for serviced lots that have views of a golf course or fresh water (Lake Apoyo and Apanas primarily).
Beachfront and ocean view property has the highest price/sqft - This holds true for houses, condos and lots. But if your house or lot has only a distant view of the ocean, you may find that lake view property has a higher price/sqft.
Comparing property prices with 2008
We’ve in the process of comparing this new 2009 data with prices in 2008 and will be revealing the trends in later posts.
We’ll also be digging deeper, breaking down the information by ‘property hotspot’ and running comparisons with other Central America markets.
From Reveal Real Estate - charting overseas property trends in Central America.
Tags: Nicaragua
Posted in Market statistics and data | 1 Comment »
Fun with maps in Central America
May 8th, 2009
We’re using maps on Reveal Real Estate to help investors looking at individual real estate developments and property hotspots to see what’s nearby. After all, location is (nearly) everything in real estate. Our maps plot the following information:
Introducing country maps
We’ve now gone one step further and built a series of country maps. The maps load with all the map markers showing, but you can select individual markers to display by choosing from the drop down menu.
In aggregate the map markers tell us a great deal about a country overall. Here are some examples of maps we like:
This map of real estate developments in Nicaragua shows how the majority of developments fall in the south western part of the country. It’s the part of the country with the main tourism attractions, most dramatic geography and cooling lake breezes.
Check out Panama’s surf spots on the Panama map below. The waves are not only on the Pacific, you can also find breaks on the Caribbean side of the country.
Have a look at golf courses on this Costa Rica map - completed, planned and under construction. You’ll find that Costa Rica has more completed golf courses than other Central American countries. Read more on golf property across the region.
And yes, Belize is all about diving - check out the dive spots along the Great Barrier reef on the Belize map below. The barrier reef in Belize is the largest in the Western Hemisphere and a World Heritage Site. (You can load a map showing World Heritage sites as well).
Here are the links again: Belize map; Nicaragua map; Costa Rica map and Panama map
Have a play around and tell us what you find. If you would like to include one of these maps on your website or blog, then contact us and we’ll be pleased to forward you the embed code. We’ll keep a link list of all sites that embed our maps.
This is an ongoing project, we’re planning to add more markers and functionality. What map markers should we add? Hospitals? Community projects? You tell us.
From Reveal Real Estate - charting overseas property trends in Central America.
Tags: Add new tag, golf property, golf real estate
Posted in Market statistics and data | 2 Comments »
Are real estate prices stickier in Central America?
April 15th, 2009
We’ve just started a new round of data collection for 2009 covering Nicaragua, Belize, Panama and Costa Rica. When we have this collected, we’ll present a trend analysis - showing how prices have changed since 2008.
Kirk Hankla, owner of International City Mortgage, on a recent trip to Nicaragua, put forward the view that we would find property prices in Central America to be stickier on the downside than in the US (or other more mature markets).
The argument for stickier property prices
The argument being that people who buy in Central America are typically making cash purchases and are usually not effected to the point of having to liquidate assets in order to meet demands. This characteristic, of not being highly leveraged, generally speaking, is how they conduct their lives in their home country as well.
Even if they were looking for financing, they would be hard pressed to find the kind of financing products commonly available in the US. This is because Nicaragua, Costa Rica, Belize and, albeit to a lesser extent, Panama do not have capital markets developed for the selling of mortgage backed debt instruments.
So due to the lack of financing, there is no debt load and the fact that property taxes are low across the region, the buyers are not backed up against a wall to meet a monthly debt service which has required that they liquidate. The result being that prices are stickier on the downside.
Regional variances will exist
We’ll see if the numbers bear this out, and we’ll dig into the regional variances. Some real estate areas, such as Panama City for example, have seen significant levels of financed purchases. And some heavily leveraged large scale projects have suspended operations - the St Regis project in Costa Rica in the wake of the Lehman Brothers collapse was a case in point.
But regionally we’re not seeing the waves of foreclosures that have swept across the US. There are of course motivated buyers who are lowering their prices, some of whom are having their hand forced by a debt burden in their home country that must be satisfied. But that may not be enough to add up to the heavy across-the-board price falls we’ve seen in the US.
We’d love to hear your views. Let us know what you think in the comments below.
From Reveal Real Estate - charting overseas property trends in Central America.
The real estate market in Central America: In graphics
March 28th, 2009
Whether you’re in the market for real estate in Central America, or you are selling, market data matters more than ever. Without data how can you determine fair value, track where the market is heading or feel confident that you are making the right investment decision? Trouble is, in Central America market data and comps are not readily available from property institutes, registries or central bank databases.
To try and fill this data gap, we’ve collected data from real estate developments in Panama, Costa Rica, Nicaragua and Belize and put this information online. As part of our research we also collected country-level indicators that shed light on the investment climate. Here are some highlights from what we have found:
Real estate developments targeting the international buyer
Costa Rica has the largest number of real estate developments that target the international investor, with 34% of the total in our database. No surprise really. It’s been on the international real estate map for longest. Panama follows close behind. This is largely due to the explosion in condo projects in recent years in the capital city selling Panama apartments.
The price for an ocean view condo
The order from most expensive to least expensive country to buy an ocean view condo is Costa Rica - Belize - Panama - Nicaragua. The data looks at median price per sq.ft.
The ordering is what you would expect given the different levels of maturity of the markets and level of infrastructure. But did you think the differential between Costa Rica and the other countries would be greater? We did.
The average size for an ocean view condo in Costa Rica tends to be larger than in other countries, which may explain part of this. Click here for a more in depth review of Belize condos. We’ll be publishing more data in later posts to dig into the comparatives further.
Internet searches on Google
There were more searches for ‘Costa Rica real estate’ on Google than for ‘Panama real estate’, ‘Belize real estate’ and ‘Nicaragua real estate’ combined. We predicted the order, but again were surprized by the differential between Costa Rica and the other countries - this time in the other direction.
Cost of living
Nicaragua stands out as offering the lowest cost of living. Using purchasing-power-parity (PPP) data we can determine what US$1,000 ‘adds up’ to in different countries. In the US $1,000 has the purchasing power of $1,000, but in Nicaragua it has a purchasing power equivalent to $2,629. We have to be careful not to draw too much from these averages as they don’t apply to all product categories. But for day-to-day goods and services your dollar will stretch further in all four countries than in the US.
Completed golf courses
There are several golf courses planned or under construction in the region. At least 3 in Nicaragua and 3 in Panama. The data below is for completed golf courses that can be played on. Before seeing the data, would you have guessed that there would be more than 2 completed golf courses in Nicaragua? See more on golf property.
The data is drawn from research done in 2008, see notes to the data for more information. We’ll be updating for 2009 and charting the trends. Dig into our main site, run some searches, and check out the property hotspots and country indicators for Nicaragua, Panama, Costa Rica and Belize.
What’s your reaction to this data. Any surprizes for you?
From Reveal Real Estate - charting overseas property trends in Central America.
Costa Rica tops our list coming in first and second. In fact, 3 of the 7 regions fall within Guanacaste, Costa Rica’s northern state. The data is based on our database of real estate developments in Costa Rica, Panama, Belize and Nicaragua. Nicaragua, being a cheaper destination than the other countries, did not make the list.
1. The stunning coastline of Coco, Hermosa and Papagayo in Costa Rica’s Guanacaste region tops our list. Here the median price for an ocean view condo is $340 per sqft. The region is packed with amenities from tennis clubs and marinas to championship golf courses and luxury spas. It has some epic surf breaks, good infrastructure and is very accessible from Liberia’s international airport. Celebrity purchases, major hospitality brands and top class attractions abound in the region so it’s not surprising that it tops our list.
2. Just next door, also in Guanacaste, lies Flamingo where the median price for an ocean view condo will set you back $305 per sqft. Tourists are attracted to the spectacular beaches, the world-class sport fishing (there’s an international tournament every year) and the numerous dive spots.
3. Ambergris Caye comes in third. It’s the most visited part of Belize and offers the picture postcard Caribbean experience - sparkling white sand, azure waters, swaying palm trees and a great barrier reef just off shore. Belize condos are the main draw on the island. And for a median price of $290 per sqft, you’ll be on your way to owning an ocean view condo in this important tourism area. The added bonus for many international real estate investors: you won’t have to learn another language as Ambergris Caye is English speaking.
4. Fourth on the list is Tamarindo located, wait for it, in Guanacaste Costa Rica. Long recognized by surfers for its great waves, Tamarindo now offers something for backpackers, luxury travelers and everyone in between. You can take advantage of lovely local beaches - some with turtle nesting areas, dive spots, golfing, numerous night-spots, restaurants and, of course, plenty of sunshine year round. An ocean view condo clocks in at $285 per sqft.
5. Jaco lies on a wide, grey-sand bay on Costa Rica’s Central Coast in Puntanrenas. Well known hospitality brands such as Sonesta, Ramanda and Wyndham have set up store along the beach front and you’ll lose count of the internet cafes, curio stores, tour agencies, souvenir stands, bars, restaurants and nightclubs that jostle for position on the main road. You’ll find ocean view condos here for around $280 per sqft.
6. Our second Caribbean region, Bocas del Toro, in Panama comes in 6th. If you want an ocean view condo here you’ll be looking around $275 per sqft. The cluster of islands that make up the archipelago have become a key tourist destination for visitors to Panama. Unusually for the Caribbean, you’ll not only find great local dive spots but also some good surfing waves.
7. Cosmopolitan Panama City with it’s soaring skyline of glass and steel comes in 7th. The town is a world class financial center and business hub that offers a range of exciting experiences to visitors. You’ll find a vibrancy here that is rare in Central America. Investors looking for US style infrastructure, excellent health care and a benefit-laden retirement program tend to look no further. You’ll need to lay out around $265 per sqft. for an ocean view condo. Click for a 2010 update on the Panama apartment market.
The data was collected during 2008. We’ll be updating for 2009 and tracking the trends.
So tell us, would you buy in one one of these property hotspots?
Tags: Belize, Belize condos, Costa Rica, Panama, Panama apartment
Posted in Comparison shopping, Market statistics and data | 1 Comment »
What $50,000 will get you in Belize, Panama, Costa Rica and Nicaragua less than 90 minutes from the international airport.
February 16th, 2009
The key to cutting a great deal in Central America is getting hold of objective market information to determine fair value. Trouble is, in Central America investors can’t draw on industry databases like the Multiple Listing Service. There’s no equivalent to zillow or trulia and local sources of information can be prone to exaggeration and hype.
Our goal is to shed some light on the market by aggregating real estate prices from developments, comparing them against the median for the country as a whole, and putting the information online. Savvy buyers will also want to know how far a development is along with its master plan and its proximity to services. So for each development we track whether the community amenities are completed or still in planning phase and provide an estimate of driving time to the nearest town and international airport.
So what can you get for $50,000 less than 90 minutes from the international airport?
Here are 9 projects that fit the bill. We’ve based our analysis on median asking prices for property in real estate developments collected between July and September 2008.
Starting in Belize, you can pick up a home-site at Belize Reserve, an eco-community located in Cayo, around 15 minutes from San Ignacio for under $25,000. A swimming pool, hotel and restaurant are planned. You’ll find similar prices at Camino del Rio, a 63 acre development also located in Cayo, this time east of Belmopan. Sticking to Belize, both Progresso Heights a residential community in Corozal located on Progresso Lagoon which leads to Chetumal Bay going out to the Caribbean Sea and Waterside at Flowers Bank on the Belize River have lots available for under $50,000.
Moving to Nicaragua, for $20,000 you could be the owner of a green lot at Club Alegria located near Granada with views to Mombacho volcano. Close-by you’ll find Club Vistalagos peering over the eastern edge of Lake Apoyo and Villa Lagos a community located in a green setting near the port of Asese, Lake Nicaragua. At both projects you’ll find serviced home-sites for under $50,000.
In Costa Rica, around four miles west of the tourist town of Tamarindo, you’ll find Lomas de Santa Rosa and lots for sale in the low $20,000s. And, if Panama takes your fancy, then Rancho los Suenos a project located 45 minutes from Panama City and close to Espave and the beaches has lots with a median price of under $30,000.
We’ve based the above on median prices for individual real estate categories. We’ll broaden the search in future posts to include real estate projects further away from the airport.
For now, what have we missed? We’d love to have your views.
Posted in Market statistics and data | 4 Comments »
7 real estate developments with beachfront lots below $15.85 per sq/ft
January 27th, 2009
Why $15.85 per sq/ft?
Well, the revealrealestate median price per sq/ft for a beach front lot is $15.85. Our analysis looks at real estate developments, resort communities and condo projects in Panama, Costa Rica, Nicaragua and Belize (July to October 2008). Most of the real estate developments target the international property investor.
The 7 real estate developments with beachfront lots below $15.85 per sq/ft are listed below. Remember, some of these will be early in the roll-out of their master-plan while others will be more advanced. Click though to each development to see the price data, location information (via Google maps), accessibility information (including distance from the international airport and whether roads are paved) and lifestyle information such as proximity to a golf course, a dive site, equestrian facilitites or a surf break. We’ve also collected information on the amenities offered and whether these are completed or planned.
- Rincon Beach Estates, Panama
- Cerros Sands, Belize - Property hotspot: Corozal
- Lobster Cove, Panama
- Cocoplum Belize, Belize - Property hotspot: Placencia
- Costa Paraiso, Nicaragua
- Los Suenos Island Resort, Nicaragua - Property hotspot: Central Pacific Coast
- Montecristo Beach and Golf Resort, Nicaragua - Property hotspot: Central Pacific Coast
Property hotspots and reviews direct from investors
If the real estate development falls within one of our property hotspot areas, we’ve included a link to the property hotspot page. Here you’ll find charts that compare median prices for the hotpot compared against the country.
And if you have visited the region or have a story to tell about investing in Central America, please leave a review. We think reviews direct from real estate investors add an important layer of information for others who may be thinking of investing.
Posted in Market statistics and data | No Comments »