Sunday, July 03, 2011
Want a bargain colonial home? Read on to find out more...
Dear Reader,
You're enjoying a rich cup of coffee on the terrace of a café overlooking a plaza, filled with trees and little market stalls stacked with hand-made ceramics, jewelry, and woven hammocks. Horse-drawn carriages canter past, taking tourists to see the city's sights. Colonial buildings in egg-yolk yellow, sky-blue, and jade-green line the plaza and the narrow side streets. One of those colonial homes is yours, and your plan for the afternoon involves a dip in your pool, a good book and a hammock on the terrace, before meeting up with friends with dinner.
If you long for a colonial home, in a setting steeped in history and charm, but didn't think you could afford one...you need to check out Granada, Nicaragua. This is a distressed market right now, and it's throwing up some bargains.
We've covered distressed markets this week: Panama, Ireland and Roatan. All three countries have seen their real estate markets boom, peak and then slow. All three have a similar problem: over-supply and a lack of buyers.
Granada's distressed colonial market is different. Over-supply is not an issue. This is a city with a limited supply of colonial properties. But a lack of buyers...coupled with political concerns...means that this is a property market in crisis. And that has pushed prices for old colonials to pre-boom levels.
Nicaragua's property boom started in 2003. It was driven by foreign buyers, mostly from the US and parts of Europe, who saw the potential of this country, and wanted a piece of it. Prices rose sharply...until 2006. In 2006, Daniel Ortega won the presidential election.
Sales slowed that year, as buyers held off making a decision until after the election. Once Ortega won, they held off some more...concerned about his left-leaning policies and what effect it would have on private ownership of property Nicaragua. Those fears proved groundless. Since his election, Ortega has not infringed private ownership rights. In fact, he helped clarify the ownership of property in coastal areas with the passing of the Coastal Bill in 2009.
But by the time those US and European buyers figured that out, their own circumstances had changed. An economic slowdown back home meant fewer buyers had the funds to purchase an overseas home. Those overseas buyers dried up. The market slowed. And prices started to fall back to pre-boom levels.
And Low-Cost Living
It's not just real estate prices. Nicaragua offers one of the lowest costs of living in the Americas. That's partly why MSN Money ranked Nicaragua top of their the list of Top Ten Exotic Retirement Spots for 2011, telling readers that 2011 is the time to put this country at the top of your super-cheap overseas retirement list.
And more tourists are visiting, too. 2010 was a record year for tourism in Nicaragua. Visitor numbers exceeded the one million mark. Figures for the first two months of 2011 already show an increase on 2010.
No wonder. Nicaragua's an exotic land, where you can swim in crater lakes, trek through misty cloud forests, surf the warm Pacific waves, snorkel in clear Caribbean water....and explore historic colonial towns.
Exports grew in 2010, reaching a record $1.9 billion. The country added 150,000 new jobs. With economic growth around 3% for 2010, the economic outlook for 2011 is also good. Indeed, the government plans to increase direct foreign investment (up 15% in 2010), mainly in the energy and telecommunications sectors.
Nicaragua offers a safe, low-cost lifestyle...and Granada offers comfortable living and bargain colonial property.
A Colonial Gem
Sitting on the shores of a vast freshwater lake sprinkled with more than 400 volcanic islands, Granada has an unmistakable colonial charm. Thick-walled adobe homes line the narrow streets, with terracotta roofs and heavy wooden doors. Grander buildings with spires and bell towers frame the brilliant blue sky.
Granada's traditional colonial homes feature wooden doors, thick adobe walls and tile roofs
The nearby market town of Masaya is worth a trip for local handcrafts (the area is famous for painted ceramics, bright-colored hand-woven fabrics, hammocks, and hand-carved wood furniture). Moreover, you're close to the stunning beaches and sandy coves scattered along Nicaragua's southern Pacific coast.
You'll find a small group of expats already settled in Granada, running local businesses, offering services, or enjoying their retirement in this tranquil location.
You can take your pick from dozens of restaurants and cafes, and you'll find you can eat out more often. Breakfasts run around $5, lunch $5-10, and dinner should easily come in under $20. Household help, a gardener, medical care, property taxes...they all cost significantly less in Nicaragua than they would back home. You can upgrade your lifestyle...and slash your living costs.
Properties at Pocketbook Prices
Some sample properties on the market today in Granada include fixer-uppers from only $25,000. Renovation costs run $350-$500 a square meter, depending on the level of the restoration, and what grade of finishings you want.
One fixer-upper, close to Granada's iconic San Francisco convent, is $160,000.
That gets you a 400 square meter (4304 square feet) lot with a 250 square meter (2690 square feet) building...and a great location.
A move-in ready home, recently-restored, offers three beds, three baths, and a central location with views to the Cathedral.
It's on the market for $175,000.
If you want to run a business, a hotel with 5 queen/king rooms and a suite has a price tag of $349,000. The property has completed extensive renovations on the first of two adjoined homes.
All the restored rooms have ceiling fans, air conditioning, private bathrooms, and cable TV. The suite boasts a Jacuzzi, outdoor shower, and a private balcony with views of both the lake and the volcano. The property covers 462 square meters (4971 square feet) and is ready to go as a business.
And finally, affordable doesn't always have to mean a tiny budget. If your idea of colonial heaven revolves around luxury, a huge six-bed six-bath home, complete with spacious patios and terraces, a swimming pool and a prime central location, is priced at $599,000.
The building covers 600 square meters (6456 square feet), so that's still less than $1000 per square meter.
Colonial Comparisons
Historic renovated property in Panama costs $2000-2200 a square meter on average. Granada's pricing of around a $1000 a square meter would buy a total wreck in Panama...four crumbling walls, and nothing else.
Colombia's Cartagena averages $3000 a square meter. And even Ciudad Vieja, (in Montevideo, Uruguay) starts at $1500 a square meter for property in need of some remodeling, to upwards of $3000 a square meter for newly-refurbished units in premium locations.
That places Granada top of the pile for affordable colonial homes. Plus, it's got the most magical, relaxed lifestyle...the lowest cost of living...and the most dramatic setting of all these historic locations.
I don't expect these low prices to last forever. There's a limited supply of colonial properties. And they stay as single family homes or become boutique hotels or guesthouses...they don't turn larger properties into multiple apartments in Granada, as they do in Panama or Uruguay.
If you want to find out more about the properties I've mentioned, contact our local broker on the ground, David Joyce, here.
Margaret Summerfield
Posted Under:
nicaragua, affordable, colonials
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