reveal real estate

When overseas retirement looms, retreat to Central America

June 20th, 2010

With close to 100 million Baby Boomers hitting retirement age in the next ten years, locations to live out the golden years have become a hot topic, and Central American countries are getting their fair share of attention. But what makes these relatively unknown and moderately misunderstood destinations a good choice for senior living? And which countries boast the best place to hang your hat for the foreseeable future?  Read on to find the top Central American countries to call home.

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1. Nicaragua is at the top of the list of places to retire abroad for those on a budget. The country’s benefit-laden retirement program was revised in 2009 and includes incentives such as no tax on foreign earnings and duty free imports from automobiles to household items. This combined with the innovative Law 306 (tax and import duty exemptions for tourist-related ventures), and the lowest cost of living in the region does much to encourage retirees to the country. And yet, Nicaragua has not yet realized the kind of influx that Costa Rica and Panama enjoy. Some put this to the ‘close relationship’ that the current President has with Hugo Chavez, the controversial leader of Venezuela. But others stress the ‘early in’ nature of the real estate market and it’s potential for future growth.

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2. Panama still beats expectations. Between the beaches (70 to 90 degree weather year-round) and the highlands (50 to 80 degrees and less humidity), you’ve got a range of climates to choose from. But the real perks of retiring here include a stable government, modern banking (the U.S. dollar is legal tender), tax benefits (no tax on foreign-earned income, property tax breaks), and solid roads and telecommunications. The boom years saw hundreds of new condo towers in the capital city (see more analysis on Panama apartments) and real estate projects launched across the country. This was followed in 2009 by a marked slowdown in sales activity. Some over-leveraged projects stalled or suspended operations and re-sales were offered at large discounts. But as we enter the second quarter of 2010, local real estate agents note that enquiries are rising again.

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3. Belize offers the classic Caribbean experience mixed with a long-standing culture of ecotourism. It’s a tiny country packing a remarkable amount of diversity between its borders - tropical forests, mountain summits, a palm-fringed coastline and the longest barrier reef in the Western Hemisphere. Belize stands out as being a true banking haven (retaining high levels of liquidity through the recent banking crisis) with strict secrecy laws.  A major bonus for retiring overseas in Belize is that the official language is English and the legal system is based on British law. Things have slowed since the financial crisis (except perhaps in Placencia where the market seems to be booming) and commentators talk about a more stable and less speculative market taking hold.

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4. Costa Rica has long been considered a great place retirement overseas and for many years set the benchmark to follow for other Central American countries. More recently however, its retirement program has fallen behind its regional neighbors that offer more incentives aimed specifically at retirees. As it’s only her second day in office, it’s too early to see what Laura Chinchilla, Costa Rica’s new President, has planned.  The capital city of San Jose and the Central Valley region seem to be bucking the general slowdown and attracting an ever-growing number of retirees. The northern Guanacaste region also appears to be climbing back after a difficult year in 2009.

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After the storm: Pessimists vs. Optimists

February 1st, 2010

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The global financial crisis and its impact on international real estate is still discussion topic #1 among investment analysts, real estate agents and developers in Central America. Everyone agrees that 2009 was a difficult year. The tricky part is that the arguments being presented paint quite different scenarios for the future.

On the one hand, large-scale real estate projects, especially if heavily leveraged, have proven vulnerable. The suspension of the St. Regis project in Costa Rica in the wake of the Lehman Brothers collapse was the first high profile example. Other project closures and suspensions followed in 2009 including the Rosewood at Costa Carmel (Costa Rica), La Punta Papagayo (Costa Rica), Marea Alta (Nicaragua), and Orchid Residences (Panama City), to name a few.

But perhaps more important than the direct impact of the international financial crisis, the property pessimists argue, was the indirect effect of tighter lines of credit in North America - the main source of buyers for international real estate in the region. No longer is the market being carried by North American buyers flush with equity and easy credit. It’s easy to point to low sales volumes and falling prices to make this point.

Any bright spots? Counter trends?

One can overdo the gloom.  The optimists point to sticker prices on the downside in Central America relative to more mature markets. The relatively low levels of lender mediated activity across the region meant that the market did not suffer the kind of foreclosure crisis we’ve become used to reading about in the US.

Second, international real estate markets, and Central America included, are increasingly being seen as tax-friendly, safe haven investments. The kind of places investors and retirees seek to shield themselves from the US financial system.

Added to this, is a new wave of lifestyle buyers looking for areas where the real estate is cheaper and, crucially, the cost of living more affordable. We included examples of developers, such as Montecristo Beach & Golf Resort in Nicaragua, Grand Baymen in Belize and Valle Escondido in Panama, successfully marketing to these buyers in a recent article for the International Property Journal.

The upshot?

The impact of the financial crisis has been mixed both within and between countries. Developers are having to adapt quickly to a new market.  Those that understand the mindset of the post-crisis real estate investor are best placed to succeed.

Investment activity is trending towards well-planned developments with good locations, quality products and a master plan that delivers against end-user requirements. Pre-construction offerings in weak locations face an uphill battle.

The property pessimists are right that the boom years are over for international real estate in Central America.  It’s a different market now, with buyers firmly in the driving seat. Welcome to the ‘new normal’.

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

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.

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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.

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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.

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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).

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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.

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