Property Sales In Nicaragua
Fall As US
and Canadians Desert The Market
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Property Sales
In Nicaragua Fall As US
and Canadians Desert The Market
Property sales in Nicaragua have fallen by
up to 35% in the last year with second home
investors deserting the emerging real estate
market.
The market peaked in early 2008, according
to Brooke Rundle, a broker with Coldwell
Banker Nicaragua. She estimated that the
number of transactions has decreased 30 to
35% since.
However the downturn may have begun before
then according to figures from the Managua
office of the First American Title Insurance
Company which shows that orders for title
insurance began declining in 2006.
San Juan del Sur is the main coastal hub for
tourism and real estate development but it
has seen property sales slow. This is not
surprising according to Rundle as most of
Nicaragua's foreign property investors come
from the US and Canada where the economic
downturn is robust.
There is some hope that European property
investors can be persuaded to the market.
Sam Stewart, a broker with Re/Max Horizons
in San Juan del Sur, said that the one of
the big attractions is that Nicaragua is a
cheap place to live for retirees.
He believes that Nicaragua's popularity as a
retirement destination will increase as
property values increase in other South
American locations such as Costa Rica,
Mexico and Panama.
But like all emerging property markets
investing is not always straightforward.
Although there are no restrictions on
foreign ownership of property, real estate
agents rarely get exclusive rights to
advertise properties in Nicaragua, and that
there is no multiple listing service. This
means sellers can market their properties
through several real estate agents
simultaneously.
Buyers pay a transfer tax equal to 1% of the
purchase price. An additional 1 to 1.5% in
legal fees goes to the lawyer who researches
the title and draws up the closing
documents. The seller usually pays the real
estate agent's commission, which is 3 to 6%
for a home, but 7 to 10% for development
land. |
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