Well, 2009 has been an interesting year. The big headline was, of course, the global financial crisis and its aftershocks. Now, as we enter 2010, a sense of stability and predictability (a ‘new normal’?) is returning to the international real estate sector.

One of the most telling aspects of the new normal is the retreat of the speculator buying for quick re-sale profit. The speculator has been replaced by a new type of international real estate investor - a ‘post crisis’ investor - with a different mindset and goals.

14 characteristics of the post crisis international real estate investor:

• More informed and will demand better service from the industry
• Will not make decisions based on thin slices of information but will demand openness and transparency
• Skeptical of promises made by developers on their websites and brochures
• Wary of pre-construction properties, preferring to purchase completed real estate with amenities they can enjoy right now.
• Will want to understanding the financial health of the community before they invest
• Will expect substantial discounts on the market highs of 2007
• Will haggle, even when it comes to high-end properties
• Will be drawn to real estate that is a bit low key
• Interested in properties that generate revenue in the short term.
• Motivated by lifestyle factors (not just financial gain)
• Focused on regions with a low cost of living, good health care and safe streets
• Will avoid areas with over-supply risk and copy-cat developments
• Will seek safe haven investments and tax friendly environments
• Interested in contributions to larger concerns such as environmental preservation, the local community and sustainable approaches to building, water, and energy

With change comes opportunity

In order to succeed in 2010, developers will need to innovate their products and their marketing to embrace the mindset of the post crisis real estate investor. Those that do will earn their way out of trouble. Those that don’t will suffer.

Tourism and retirement as a business model for international real estate in Central America is not broken, it has just shifted.  Yes the over-leveraging of the North American and European consumer has come to a halt and the debt in finances will have lingering consequences. But as retirees and investors take stock of their situations and consider their options, many will still be looking for a more affordable life overseas and safe, tax-friendly places to plant their money.

We’re looking forward to a healthier, more sustainable market for international real estate in Central America. One that is more open and transparent and less reliant on the rampant speculation of the past … 

…but it may take all of 2010 to get there.

Related posts:

1. Which of these 5 types of overseas property investor are you?
2. After the storm: Pessimists vs. Optimists