Wealthy investors seeking safer havens for their capital in these troubled
times may not have considered Latin America - until now. With a history of
hyper-inflation, coups, dictatorships, corruption, drug gangs and social
inequality, it has not been the most obvious place in which to buy property.
But the region's growing economies - plus recent political stability - mean
that cash-rich investors are snapping up homes there, from holiday villas on
Brazil's beaches to high-rise flats in Mexico City and Panama.
Latin America is high on glamour but low on prices - the perfect mix for
investors. For £27,000 you can buy a stylish flat near the beach in Brazil
or an apartment in central Buenos Aires. Yet property booms are not
guaranteed to make you money. Fast building and quick sales can often lead
to bad-quality construction and a glut of empty property. Charles Peerless,
director at Winkworth International Development, says: “Foreigners could be
offered developments that haven't sold locally because they are not so
great.” So where do you go, and what do you buy? Here we show you how to
make the most of the best, and avoid the worst, of homes for sale in Latin
America:
BRAZIL
Property prices have been rising fast in the biggest country in Latin America,
thanks to a burgeoning middle class, preparations for the 2014 football
World Cup and a growing number of foreign investors. Most of the new resorts
are in the northeast, which has the best year-round weather and some of the
most beautiful beaches. The stretch of coast between Salvador and Fortaleza
was fairly undeveloped until European developers, mainly from Spain and
Scandinavia, started building about five years ago. Now the British are
moving in.
Prices in some of the best new developments have risen by 25 per cent in the
past 12 months, says Savills International. But a repeat performance is
unlikely. Harry Lewis, a director of Savills, says: “We expect to see a
surge in sales this year. But though top-end developments might see prices
rise by between 15 and 25 per cent, growth of between 8 per cent and 20 per
cent is more realistic. Investors who buy in bulk might see better returns
than individual buyers; for most there is not much to be gained from a
short-term flip.”
The most popular hotspot is Natal, the state capital of Rio Grande do Norte,
on the eastern tip of South America. The property boom will be given a boost
with the expansion of Natal airport, to be completed in a couple of years.
There are dozens of properties for sale in the area's resorts. For £45,700 you
can buy a one-bedroom apartment in Grand Natal Golf, a large resort with
five golf courses, a heliport, tennis courts and spa (www.brazilianventure.co.uk
). This resort is 20 minutes' drive from the airport, but prices drop the
farther you go.
A one-bedroom apartment in Porto dos Corais, 45 minutes' drive away, costs
just £27,000 (contact TMPA on 01732
451144).
MEXICO
Americans have been investing in property here for years, but as the US
economy cools,
developers all over Central America are trying to appeal to Europeans. While
villas on the coast or golf resorts have always been popular with US buyers
looking for a holiday let or somewhere to retire, investors now are heading
to Mexico City in search of capital gains.
Charles Peerless says: “There is a shortage of good-quality rental property in
Mexico City, although the market is quite mature and as close to what you
would get in London in South America.” Rental yields are about 8 per cent.
Assuming the US does not go into deep recession, Peerless predicts that
prices will rise by 8 to 10 per cent in the city. Note, however, that
capital gains tax is 26 per cent. Winkworth is selling one-bed flats in
Reforma 90, a 38-floor tower in the city's business district, with prices
from £96,210 to £338,029 (Winkworth:
020-7691 4269).
PANAMA
The country is experiencing a construction boom. The expansion of the canal, a
free-trade agreement with the US in 2006, and the rise of a service-based
economy that provides administration back-up to US companies have unleashed
a building frenzy in Panama City. There are more than 35 towers going up,
including the Trump Ocean Club, which has a sail-like shape reminiscent of
the Burj al-Arab in Dubai. With another 300 towers in the planning process,
it is estimated that there will be 40,000 flats on the market in 2010.
Who will buy them? Panama is still a country in transition. The shiny new
towers are at odds with the poverty around them and the whiff of sewage from
the canal on a bad day. The rental market is nowhere near as sophisticated
as Mexico City or Brazil. US investors who might have bought have
disappeared, and developers are targeting Europeans. For those ready to
gamble that Panama will continue to flourish as Latin America's call-centre
capital, property is cheap and the tax regime favourable, to companies as
well as individuals. The Colón free-trade zone is home to 2,000 firms that
employ expatriates from all over South America. A three-bed apartment in a
27-floor tower starts at £53,510 (Avila
Taylor Global Estates 0161-238 4984).
ARGENTINA
The peso's devaluation in 2002 ignited a property boom. Investors have been
snapping up developments in Buenos Aires (which is currently under blockade
by farmers) and ski chalets and country retreats in Patagonia. Property
prices in Buenos Aires have risen by 10 to 20 per cent over the past couple
of years, Savills says. With the dollar weak and the peso at six to the
pound, sums could work in the British buyer's favour. From £27,500, you can
buy a one-bed flat off-plan in the Alto Grande del Arte development, in
central Buenos Aires (Move With Us, 0870 4204131). A four-bed ski chalet
near San Carlos de Bariloche costs £69,780, and 2,000sqm (21,500sqft) plots
in the nearby Arelauquen Golf and Country Club go for £69,000 (argentinahomes.com
).
VENEZUELA
A wild card. Hugo Chávez, Venezuela's socialist president, seems determined to
tighten his hold on the country. He may have failed to win last year's
referendum, which would have effectively given him lifelong keys to the
presidency and control of the central bank, but the oil is still in his
hands. Property buyers here must proceed with caution.
This Neils guy is really something. He just described any major city or rural community in the U.S. What, no scorpions or snakes in Arizona? At least the scorpions in Panama don't kill ypou, they might numb your lips a little bit. The interior is quite safe and yes, medical facilities are spread out, but available. If you move to isolated mountains in Colorado, will you have medical facilities close by? Are drivers here diferent thank in downtown New York City?
What you fail to fiocus on is that the majority of Americans I have net and that have retired in Panama, absolutely love the people, the country, the weather and the tax benefits, which include 20 year excemption on property tax, income from the US in non taxable, the capital gains tax is extremely low, if you become a resident you get up to 30% doscounts on everything from restaurants, medical expenses, airline tickets, etc...
The second of three stages for centralizing the sewage system is under way.
Roberto, Panama City, Panama
Niels, by your perception Panama is a bad place, in one week the city of san francisco suffered 3 deaths from 3 seperate bus incidents. DOES THAT MAKE SAN FRANCISCO A BAD PLACE TO LIVE Panama is what you will make of it, the internal fraffic problems are similar to many big U.S AND U.K CITYS, Please dont bag on your perception, you must come from rural Kansas U.S. if thats what you want you need to move int Volcan, No traffic their
best to all
Michael Alan, SAN JOSE , USA
Panama is a 3 dressed up as a nine totally over rated . A legend in its own mind. A nation billed as a top retirement destination with dangerous. and gridlocked traffic, no handicapped facilities, few sidewalks with dangerous uncovered holes. Deadly diesel spewing buses race for 25 cent fares and kill 3 people a month, injuring 40. Imagine an older person here and the reality that there is no fire equipment capable of a rescue above 7 floors, ambulances with wailing sirens stuck in traffic and a system where no one gives way. You will be under house arrest here in Panama City. Move to the countryside you say ? OK but do not get sick, or stung by deadly scorpions, snakes. Medical services are scant and very simple. Remember this, everything sounds and looks better on the internet and when you talk to a realtor or someone selling something. It is cheaper and more comfortable to stay home in the US where you can buy a place cheaper and expect a cop or firefighter to show up.
Niels, Panama, Panama
I moved to Panama City, Panama 2 years ago from Malaga, Spain. I have never been happier with the choice I made, I tried to let other people know about the financial possibilities here in Panama. If you are the type that buys or follow trends Donald Trump is building a breathtaking Condo/hotel , so he must see beyond trends and sees a booming market. Very important seek guidance and do your research, there is this company which has been in the news this past weeks, they did a seminars for EU citizens and american expats about investing in property in panama, it got a good review from the local papers and also from some papers in the US. best thing it was free if you came thru their site www.thinkpanama.com, and since they use the US dollar here in Panama as their currency, you will be financially a step above others with the euro.
David, Panama City, Panama
I live here in Latin America, in Brazil. I have seen the prices increase here where I live, and the reality is if you have no mortgage in the UK you can rent your house out, and live here very comfortably, with private healthcare at bargin prices and with a maid as well. You can buy nice apartments, bigger than most UK homes for between 25 and 35 k, and you are set for a lovely and carefree retirement, plus with the good weather for any ex pat it is ideal, it is kind of like Spain used to be in the early 70's. Food is fantastic and crime is no worse than areas of London.
roy jordan, curitiba, brazil