 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.
Source: http://property.timesonline.co.uk/ |
