South American Property

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Patagonia, in southern Chile, may not be everybody’s idea of their ultimate destination, but we found an interesting property for sale and thought it would make a worthwhile comparison with the rest of the world.

Moreno Glacier, patagonia – Photo Credit

The first thing to bear in mind when thinking about buying property in Chile is the complete and utter lack of regulation as far as estate agents are concerned. All you need to become an estate agent in Chile is’.. Well, actually – you don’t need anything. A good guide to the potential pitfalls and some of the fun one must endure to buy a property in Southern Chile can be found here.

Patagonia is a geographic region containing the southernmost portion of South America. Mostly located in Argentina and partly in Chile, it comprises the Andes mountains to the west and south, and plateaux and low plains to the east. allsouthernchile.com have this spectacular fly fishing lodge for sale – price $325,000 – around £164,000 – the price of a scruffy terrace in the West Midlands. So if you were thinking of getting away from it all, this one’s worth a look.

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From the agent’s site:

Established fly fishing lodge for sale in the Rio Azul Valley, Patagonia. Lodge overlooks the confluence of the Futaleufu and Azul Rivers and has a spectacular view of the Tres Munjas, the highest peak in the region. The lodge sits approximately 3 hours from the airport and coastal town of Chaiten and is approx 40 minutes drive from the Argentine border via the town of Futaleufu.

Included in the sale are all vehicles seen in the photos and a number of rafts, life jackets and tools. And of course, and indispensable satellite phone. We suspect it might take a while for help to arrive should you feel the need, but that’s what getting away from it is all about. We have to say ‘ it’s tempting.

Agents site

Resort Site

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Panama City Skyline
Panama City Skyline [Photo credits to Young in Panama on Flickr]

Earlier this month Fortune Magazine featured an article on ‘Panamania’, the explosive growth of Panama’s capital city in the last few years.

Panama’s economy is booming with 8.1% growth in 2006 and Panama City is the focus for a lot of this growth. The article quoted Adolfo Olloqui of Grupo Olloqui saying that Panama was inheriting the mantle of Miami (1500 km to the north) now that visa requirements are making entry to the US more difficult for many people from Central and South America (but see below). Grupo Olloqui itself was pitching to stamp its mark on the city with its Palacio de la Bahia (Palace of the Bay) which when finished in July 2009 would have been 350 metres tall, will have 97 floors, a hotel, 333 apartments, offices and commercial centres and will have cost $200m. In competition with the Palacio was the 104 storey Ice Tower residential and hotel block being developed by F & F Properties of Panama and due for completion in 2010. Since March there have been reports on the cancellation of both of these projects and in the case of the ‘Palace’ it is alleged to be a sorry tale of poor planning, lack of proper liaison with the city authorities and cost disagreements between the developer and the architect.

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Now that Nicaragua has achieved almost 20 years as a functioning democracy and with a vibrant tourist industry it is beginning to attract the attention of property investors. The leading tourist attractions – Granada, Leon, San Juan del Sur, the Corn Islands – give pointers to property opportunities within the country.

Leon and Granada used to be the important centres in colonial times but are now dwarfed by the compromise capital, Managua, with its population of 1.6m. Available real estate tends to be relatively cheap but in need of complete renovation. Much is written about the charm of Granada but less about the attractions of living there for a longer period of time. It is estimated that the city has a 1,000 strong community of American expatriates.

The largest developers of luxury condominiums in the United States; The Related Group is to invest more than $1 billion in Mexico’s real estate sector over the next two years through a newly formed subsidiary called, Related International.

Related International is to start developing upscale sea facing luxury condominiums on Puerto Vallarta, Mexico and then follow up with other upscale condos and hotel developments in Mexican tourist hotspot such as Acapulco, Cabo San Lucas, Playa del Carmen and Zihuatanejo.

Construction of the development in Puerto Vallarta (ICON Vallarta) is to begin in mid-2007 with an estimated construction cost of $200 million which will include 343 condominiums ranging from $200,000 to $1 million.

Read their Press release here

Do you follow the Mexican real estate market?

If yes, do you think there is demand for luxury condominiums in Puerto Vallarta and Mexico as a whole?

Mortgage securitization has helped spur a boom in real estate in Mexico.

MEXICO CITY – It may lack the frenetic activity of Panama or the bargain-basement prices of Argentina, but the Mexican real-estate market is growing as never before on the basis of the nation’s new-found economic stability.

The growth is evident in all areas: commercial, industrial, vacation and retirement properties, and upscale housing, but nowhere more than in low-cost homes. Hillsides on the roads leading out of the working-class north and east of Mexico’s huge capital are peppered with housing developments. Though reminiscent of Pete Seeger’s “little boxes”, there ends all resemblance with those of the song. Seeger’s little boxes were inhabited by people who played golf and drank Martinis; those who live in the new postage-stamped sized Mexican houses are former residents of hardscrabble barrios who often face two-hour journeys on public transport to reach jobs in the city center where some earn as little as $4,000 a year.

They are beneficiaries of a silent revolution in Mexico’s capital markets “like electricity, you can’t see it, but the lights sure go on,” as one banker said that led to the construction of more than 3 million low-income homes during the six-year presidency of Vicente Fox that ended last December. Fox failed in achieving all the headline-grabbing reforms, in energy, labor and taxes, for which international investors were clamoring, but he turned the drought in mortgage-lending that followed the nation’s 1994-95 economic collapse into a near flood.

A key has been the securitization of mortgages, a development launched by specialist lender Su Casita; high growth rates have attracted international banks to structure the bonds, and last year Su Casita’s portfolio grew to almost $700 million. Infonavit, the government housing agency, has joined in, but there is still plenty of room for growth: mortgage-backed securities still account for only about 0.2 percent of GDP, compared with some 10 percent in developed economies.

The growth achieved by Fox has inspired his successor, Felipe Calderon, to aim for the construction of 1 million homes a year during his six-year presidency a goal that market analysts say is well within reach and will mark a huge step forward for a country where the housing deficit is reckoned at 400,000 homes a year.

Mexico’s foreign-owned banks are pitching in. BBVA Bancomer, the local unit of the Spanish-owned bank, aims to make $6.4 billion in mortgages and house construction loans this year, up from just under $5 billion in 2006. “We want to finance the construction of 110,000 homes this year,” Eduardo Osuna, the bank’s mortgage banking director, said last week.

Part of that $6.4 billion will be lent by banks acquired by BBVA Bancomer in Texas and California in recent years. The recipients will be Mexicans who live and work in the US, as well as the growing generation of US “baby boomers” seeking second or retirement homes a sector that is attracting lenders on both sides of the border.

Donald Trump’s $200 million Trump Ocean Resort Baja Mexico has highlighted a slew of US-financed developments in areas such as Baja California and Puerto Penasco, Sonora (better known to Arizonans as “Rocky Point”).

But Spanish developers are active too, particularly on the Riviera Maya, around Cancun. Indeed, buoyed by the strength of the euro, Spain outstripped the United States in investment in resort areas last year, according to the government tourism agency, Fonatur. And some of it landed up in places off the beaten tourist trail, such as the southeastern state of Campeche. The Campeche Playa Golf, Marina and Spa Resort will feature a Greg Norman-designed golf course and apartments beginning at $230,000. Spanish developer Grupo Mall is in talks with European banks with the aim of securing euro-denominated as well as dollar mortgages for the project.

Meanwhile, activity in commercial and industrial real estate is picking up fast as investors cash in on depressed prices that followed a glut caused by a building boom. By some accounts, “triple A” office space in the Santa Fe suburb to the west of Mexico City beset by transport problems – is being let for as little as $15 per square meter a month, though rates in more central locations range from $21 to $27.

But, while optimism remains high following Mexico’s longest period of financial stability of modern times, the horizon is not without a few storm clouds, not least the price of oil, on which the nation’s government relies for more than a third of its income.

Source: Latin Business Chronicle