What Are “Post Crisis” Real Estate Buyers Looking For In Central America
Central American countries, and in particular Costa Rica, Panama, Belize and Nicaragua, are starting to get the attention of real estate investors and retirees. Real estate developments, condo projects, master-planned communities are emerging throughout the region. So who are these buyers and what are they looking for in the post financial crisis era? The vast majority of the buyers are North Americans, given the close proximity and easy access from major US airport hubs. Many first visited as tourists and then returned to review real estate options. It’s the same story that has been played out time and time again across the world, with popular tourist destinations evolve into purchasing destinations. Transport hubs and the location of international airports also has a significant effect on the pattern of investor activity in the region. Some real estate agents will insist that a property can deliver on both ‘investment’ and ‘lifestyle’ criteria. In practice however buyers most interested in ‘investment’ will tend to focus on properties that are located in more ‘emerging’ destinations. While the risks will be higher, these are offset by lower prices and the promise of capital appreciation as the destinations mature. Buyers buying for ‘lifestyle’ are motivated by the possibility of embarking on a new life abroad. They focus on areas where all the services one would expect from a more mature destination are available. Factors such as security, a sense of community and close access to amenities are high on the list. They’ll also be interested in retiree and residency programs offered and the incentives and tax breaks that may be available to them. The post-crisis buyer is looking for a bargain. They are aware that it’s a buyers market right now in Central America, that inventories are high and sales volumes are down. As a whole investors are more skeptical of claims made by developers and sellers about future amenities and infrastructure improvements down the line. They prefer to buy a finished product that they can see and touch. It’s a new market for real estate in Central America. Perhaps this is a good thing? The market is certainly less speculative and this may result in a more sustainable situation through the long term. Those developers who are able to understand the changed realities and the new perspective of the ‘post crisis’ buyer will outperform the competition. For more on investment strategy follow these links on purchasing abroad with an unfair advantage, and overseas investing strategies. |