Despite plummeting real estate prices worldwide, not everyone’s willing to give up on this traditional investment. Some are setting their sights down south, buying up properties in popular hot spots such as the Dominican Republic and Saint Lucia.
“Understandably, most Canadians simply want to escape from the bitter cold winters,” says Stewart Andrews, a real estate consultant who is the managing director of Caribbean Land and Property Ltd., based in Dominica. “Other hot spots are Dominica and Belize, where the property prices are still very low compared to other islands and therefore attractive to first-time Caribbean buyers.”
But it’s not just the enviable lifestyle that lures people to the shores of the Caribbean. It’s also appealing because it offers such a diverse property market, explains Andrews, a U.K. national who lives on four acres of land in the mountains. For example, if you crave sophistication, well-constructed roads, hypermarkets (all-in-one supermarkets and department stores) and other high-quality facilities, you’ll find them on the island of Martinique. Other islands offer a more laid-back lifestyle for people who can accept a few potholes in the roads and occasional shortages of certain foods.
Others look even farther abroad. South and Central American countries are among the top picks of Roger Gallo, founder of EscapeArtist.com, based in Panama City, which offers advice about international property markets. For 2009 and 2010, Gallo likes Argentina, Belize, Brazil, Chile, the Dominican Republic and Ecuador, as well as Nicaragua, Costa Rica, Dominica, Panama and the Honduran islands of Útila and Roatán, two of the three Bay Islands.
While some might be inclined to look south as an escape to warmer climes, the global recession has strengthened Gallo’s belief that self-sufficiency should take precedence with potential buyers. That means looking for places that have a plurality of small farms, plenty of fresh water and low population density. “Americans have lost all these small farmer rights, and bureaucracy abounds,” Gallo says. “My advice is to buy property where you can grow your own food, so that if things were to get bad, you can eat.”
Conditions aren’t so bleak in other parts of the world compared to North America, according to Ronan McMahon, managing director of real estate consultancy Pathfinder Ltd. in Waterford, Ireland. For the second year in a row, the city of Fortaleza, on Brazil’s northeast coast, is his No. 1 pick. “Historically, it’s been a poor part of Brazil, but that’s changing, and even domestic tourism to Fortaleza is rising,” says McMahon.
Brazil has become an attractive market for investors because of what the world’s 10th-largest economy has to offer. “It’s sitting on one of the world’s biggest oil reserves; it has the potential to be the biggest agricultural producer on the planet; it’s got the biggest freshwater reserve on the planet, and it has thousands and thousands of miles of incredible beach line,” says McMahon.
Another attractive aspect of Brazil is that buyers can get in with a down payment of approximately 1%, followed by monthly payments of 1% during the build period, says McMahon. And with beachfront condos selling for $110,000 in Fortaleza, many see them as a steal.
That idea is just what compelled Diane Jones (not her real name) and her husband of New Hamburg, Ont., to snap up a hotel apartment in the bustling metropolis. “There are very good prices in Brazil, as well as a need for rental units,” she says. They plan to rent out their new property and haven’t ruled out the occasional jaunt there. “There will be a property manager on-site, so that will make our job easier, but another aspect that factored into our decision is the reality that Brazil is independent,” Jones says. “It doesn’t rely on other countries for resources, and we found that especially appealing.”