Belize's property market is recovering
June 09, 2011
House prices in Belize are picking up, after plunging in 2008 in the aftermath of the global financial crisis.
There are no official house prices in Belize, so in fact it is difficult to say for certain how house prices have changed. These is only one source of price estimates, and that is of doubtful reliability:
- in 2008 the average price of four-bedroom houses in San Pedro, Ambergris Caye declined 30%, according to the 2009 Coldwell Banker House Price Comparison Index (HCPI);
- in 2009 prices dropped a further 50%, again according to Coldwell Banker’s HCPI.
- In 2010 San Pedro’s average listing price for houses (February to August 2010) rose 14.3%, according to Coldwell Banker’s 2010 Home Listing Report.
These figures should be taken with some skepticism. The Coldwell Banker HPCI is an annual snapshot study, which evaluates the average sales price of 2,200 sq. ft., four-bedroom, and 2.5 bath single-family dwellings in corporate middle management suburbs in different markets, mostly in the US.
HOUSE PRICE COMPARISON INDEX (HPCI) – 4 BEDROOM HOUSES IN SAN PEDRO, BELIZE
|YEAR||HOUSE PRICE (US$)||HOUSE PRICE (BZ$)||HOUSE PRICE (%)|
|Source: Coldwell Banker®|
Prices of inland residential properties rose by about 15% annually from 2003 to 2007. Belize real estate prices rose rapidly from 2000 to 2007, with the help of the tourism and construction boom, which in turn was assisted by the Retired Person Incentive Act (RPIA), passed in September 1999, while in coastal and tourist areas, property prices rose as much as 30% every year over the same period.
Real Estate Hotspots
Belize tends to be less expensive than other Caribbean destinations. House prices range from BZ$294,002 (US$150, 000) to BZ$2,156,011 (US$1,100,000) depending on location. Condominiums range from BZ$280,281 (US$143,000) to BZ$772,244 (US$394,000), according to revealrealestate.com.
Beachfront and ocean view properties are of course the most expensive.
Belize teems with natural wonders - beautiful beaches and tropical forests, plus the ancient Mayan temples. Tourists have flocked over the past decade, and tourism now accounts 26.4% of Belize’s GDP.
The most popular destinations are Ambergris Caye and Placencia, which has most vacation and second homes.
Ambergris Caye, whose main town is San Pedro, is the country’s exclusive high-end area. Oceanfront condominium units range from BZ$205,605 (US$104,900) to BZ$2,930,215 (US$1,495,000), with the median asking price for ocean view and beachfront condos BZ$535 (US$273) per square foot, according to revealrealestate.com. Ambergris Caye has 44% of all condo projects in the country, and in recent years there’s been a remarkable number of new real estate developments, including a new area known as ‘Costa del Sol’.
In Placencia, the island’s southern coastal area, most developments are in Seine Bight village and Placencia village. Placencia’s oceanfront condo units sell for BZ$633,083 (US$323,000) to BZ$2,352,012 (US$1,200,000), with median asking prices for ocean view and beach front condos at BZ$488 (US$249).
In other parts of Belize (including inland areas), the median asking price for condos is lower at BZ$365 (US$186). Home prices in Cayo District, where the capital Belmopan is located, average around BZ$264,601 (US$135,000).
Buyers beware! In Belize, there are two prices for everything—the local price and the “rich foreigner” price. Since majority of properties for sale are not advertised, the best way to get a feel of the difference between the Belizean price and the non-Belizean price is to travel to the country and spend time there.
A top retirement destination
Belize was named as 2nd top rated place to retire by the American Association of Retired Persons (AARP)’s The Magazine in its September/October 2010 issue. Belize won 18th spot in the International Living’s Global Retirement Index: The Best Places in the World to Retire in 2010. Belize scored highest in the ‘real estate’ category, with 83 points, and high on ‘Safety and Stability’ and ‘Special Benefits’ with 82 and 78 points respectively.
Belize’s unique attribute of being the only English-speaking Central American country appeals to US retirees. Aside from language and beautiful landscapes, foreign retirees benefit from Belize’s “Qualified Retired Persons” (QRP) program, which is similar to Panama’s Popular Pensionado Program, which gives tax and residency breaks to foreigners given the status of a Qualified Retired Person (QRP). To be designated a QRP under the program, the applicant should be:
- Aged 45 or older
- Citizen of the US, the UK, Canada or Belize
- Earning a monthly income of at least US$2,000 from investments or pensions
Benefits of QRP status:
- Exemption from all taxes on income and receipts
- Exemption from all import duties and taxes on personal and household effects upon first importation into Belize (up to a maximum value of US$15,000)
- Exemption from all import duties and taxes every five years on approved means of transport (such as a motor vehicle, boat, or light aircraft)
- Dependents included in the program (Spouse and children under the age of 18 or under the age of 23 if enrolled in college)
- Permission to conduct business within Belize, if the business activities are carried on mainly outside the country and are not conducted with Belizeans. QRPs can also own rental properties.
Since 1983, according to International Organization for Migration, Belize (2010 pop. = 312,971) has received proportionately the largest influx of foreigners in Central America, but remains one of the world’s least densely populated countries.
Small mortgage market
Belize’s mortgage market is relatively small. Despite the growth of the housing market, the mortgage market has been sluggish.
The reasons for slow mortgage market growth are simple:
- There are few financially capable Belizean property buyers; therefore, little demand for mortgage loans.
- Foreign buyers usually pay in cash.
- Non-resident buyers find it difficult to get finance from banks. Plus, the maximum loan-to-value (LTV) ratio is 70%, with 20 year term.
- Mortgage interest rates are very high, usually 4% - 5% higher above US rates.
Belize’s natural wonders
A combination of natural factors – climate, the Belize Barrier Reef, a Caribbean flavor, as well as the Maya ruins make Belize truly Mother Nature’s best kept secret. Bordered to the north by Mexico, to the west and south by Guatemala and to the east by the Caribbean, Belize considers itself to be both Caribbean and Central American.
Belize was the seat of the Mayan civilization, and there are well-preserved archeological sites throughout the country, such Caracol, Lamanai and Xunantunich, which are easily accessible to tourists.
Tourists flock each year to marvel at Belize’s pristine beaches and virgin forests. It has the world’s second largest reef barrier, and its Blue Hole can be seen from outer space. Three of the Western hemisphere’s most breath-taking coral atolls are off the coast of Belize. Numerous wildlife species shelter inland, and bird watching, nature trailing, and water sports are popular.
As an ecological paradise, tourists flock each year to marvel at the pristine beaches, great dive sites and virgin forests of Belize. There were 937,466 visitors in 2009, of which 232,247 stayed over. From January to October in 2010 stay-over visitors totaled 197,065.