| |
El Salvador is fast becoming one of the best options for international investment, both for internal and global situations. Diversity and vastness are its main features, besides its really low prices, compared to the global market.
When comparing a property in Europe, with another one with exactly the same features in Latin America, we can talk about prices differences that range from four, six, or even ten times cheaper. For example, a two bedrooms apartment in London costs about US$600,000, while a similar one in San Salvador, is around US$120,000.
In the long term, terrorism and environmental issues are just some of the reasons to see the whole of Latin America as one of the most safe and sustainable resources in the world.
The Prices for Property in El Salvador
Property prices in developed countries can’t grow forever. They are more likely to stabilise, if not, to drop after the well known “real estate bubble” bursts.
On the other hand, in Latin America property prices have just started to react to the increase of demand. Despite circumstantial economic ups and downs, price tendencies are definitively on the raise.
Profits for El Salvador Properties
The average rental yield for a property in El Salvador is about 10% to 12% a year, over the value of the property, for permanent rentals. For holiday rentals, it may vary, depending on the area the property is located and the demand it faces in a particular period of time. It is commonly higher, but seasonal variations it make it harder to estimate average profits.
In case you need more information or have doubts on any of these issues, the specialised staff in January First Real Estate will be glad to answer all your questions, click here.
Buying Real Estate in El Salvador
Land of amazing contrasts
El Salvador (GDP/capita US$2,600) is the smallest Latin American country at 20,720 sq. km. But with 6.7 million people, it is the most densely populated country in Latin America.
It is a land of amazing contrasts, dominated by a long string of cone-shaped volcanoes and their tranquil mountain lakes. In addition, the country's Maya ruins are considered some of the most interesting in all Central America.
Significant tourist attractions are the Mayan ruins at Tazumal, volcanoes, forests, beaches along the Pacific Ocean, the colonial architecture, splendid churches and colorful handicraft markets. El Salvador’s climate is hot and humid.
321 km of coastline
The country has 321 kilometers of coast with many kinds of beaches La Libertad is the main beach for the capital, just 34 km (21 mi) away from San Salvador. The beaches are black from nearby volcanoes.
Playa Costa del Sol is a skinny stretch of Pacific peninsula with 30 kilometres of sandy beaches, mostly developed, with gentle waves. There are many attractive houses on the beach front.
There are also coral beaches like Salinitas Beach, plain grey-sand beaches like Costa Azul, Barra de Santiago, and Garita Palmera in Ahuachapan, and white sand beaches like those in Bahia de Jiquilisco Islands (Madresal, Espiritu Santo, and other small islands).
Beachfront lots are found in three price ranges: The lowest is around US$ 10 to 40 per sq. m., the middle is from US$ 41 to 80, and the highest from US$ 81 up in beaches like Salinitas and Costa del Sol, where the prices are around US$ 100-110.
San Salvador
Many overseas Salvadorians buy in their home country, but few foreigners have been attracted to buy here. Most foreigners are located in the capital, San Salvador (pop. 2 million) and its surrounding suburbs due to the protection offered by gated villages (El Salvador is famous for its extremely violent street gangs, known as ‘maras’).
Given the capital’s space shortage, developers are buying up large vacant lots and building high rises, and over the past 10 years in the Santa Elena zone where the US embassy is located prices have risen from US$40 per vara quadrado (0.75 sq. m.), to US$150 per vara quadrado now. High rises are particularly being built in wealthy areas such San Benito, La Colonia Escalon and La Colonia Maquilishuat.
In the north of the capital a new industrial zone is coming up, raising land prices 400% to around US$25 per vara quadrado. A speculative land boom has also taken place around Puerto de la Union, a new second port funded by the Japan Bank for International Cooperation, but so far only the Spanish Grup Calvo has built there, and the project has been delayed and may be in trouble.
Social problems
Extreme poverty affects about half the population. Lack of clear titles is another problem hindering the reconstruction process and the real estate market in general. The problem is exacerbated by inequality, criminality, and by an inefficient and corrupt bureaucracy.
Recent calamities have ravaged the country. Hurricane Mitch caused devastation in 1998, leaving 300,000 people homeless, so that in 1999 the ‘housing deficit’ was estimated at 551,000 units. Then two earthquakes in 2001 left a further 20 to 25% of the housing stock damaged or destroyed, with 174,000 houses wrecked, and about 1.5 million people left homeless.
Yet signs of economic progress are visible, such as new malls and new condominiums. The government has greatly improved the road infrastructure leading to the beaches, to attract tourism, so that the previously 4-hour journey from the capital to Salinitas now takes an hour.
|
