Real estate markets worldwide are in trouble…but not all of them.
That is to say, while most markets have slowed…and many have fallen…some dramatically…a handful notably have not.
In fact, a few key markets make enormous sense for real estate investment right now. Specifically:
Colombia: This country’s pro-market president, Alvaro Uribe, in office since 2002, has made it his mission to fight organized terrorism, and his efforts are paying off. The result is that Columbia is one of the two most interesting real estate investment plays in Latin America today (see below for number two).
Columbia has enjoyed GDP growth of nearly 7% a year for the past two years and is looking at a jump of another 5% this year. House prices in the country, on average, are up more than 14% in the past year. Yet, the cost of entry remains low. You can buy well for well less than US$1,000 per square meter.
Panama: “Does Panama really still make sense?” asked an investor friend over the weekend.
No, Panama doesn’t still make sense. Panama makes more sense than ever. There’s a reason Lief and I have chosen to relocate here now…when, in truth, we could be living anywhere. I’d qualify Columbia as a growth market. Panama is a boom market, the fast-emerging Dubai of this hemisphere.
Panama’s economy has expanded at well over 7% a year every year for the past five. And I predict these growth levels will continue for the next five, as well, at least, thanks to the Panama Canal expansion work and the continuing retiree migration from north of the border.
This country is also a safe haven for U.S. dollar investors…as it uses the dollar itself.
P.S. Panama is a freight train roaring down its tracks…Columbia is shaping up to be the best real estate investment market nobody noticed.
Here are the two other Latin America plays that make sense right now:
Uruguay: The Uruguay economy rose 11.8% in 2004, 6.6% in 2005, 7% in 2006, and 6.5% in 2007. And Montevideo apartment prices rose 13% last year. Again, this is a growth market you should be paying attention to…and that you can still afford. Prices in old town Montevideo remain a bargain, at US$550 to US$850 per square meter.
Nicaragua: Yes, this country’s got troubles right now, but Ortega’s only got a couple of years left in office. Meantime, prices in Nicaragua remain a super-bargain compared with Costa Rica, the country it is most often compared with.