Residential Real Estate - El Salvador

El Salvador

In El Salvador, the Residential Real Estate market market is forecasted to achieve a significant milestone by reaching a value of US$152.60bn in the year 2024.
This projection indicates a positive trajectory for the market's growth.
Furthermore, it is anticipated that the sector will exhibit an annual growth rate, commonly known as CAGR, of 3.46% between 2024 and 2029.
As a result, the market volume is expected to increase to an impressive US$180.90bn by the end of 2029.
When comparing the global Real Estate market, it is noteworthy that China is projected to generate the highest value.
In 2024 alone, China is expected to reach an astounding US$112.9tn in terms of Real Estate value.
The demand for luxury beachfront properties in El Salvador is rising due to the country's stunning coastline and growing tourism industry.

Key regions: Europe, Brazil, France, Asia, United States

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Analyst Opinion

The Residential Real Estate market in El Salvador is experiencing significant development and growth.

Customer preferences: Customers in El Salvador are increasingly looking for residential properties that offer modern amenities and conveniences. They are interested in properties that are located in safe and secure neighborhoods, with access to essential services such as schools, hospitals, and shopping centers. Additionally, customers are seeking properties that are energy-efficient and environmentally friendly.

Trends in the market: One of the key trends in the residential real estate market in El Salvador is the increasing demand for high-rise apartment buildings. This trend can be attributed to several factors, including the growing urbanization and population density in major cities, as well as the desire for a more convenient and low-maintenance lifestyle. High-rise apartments offer residents the opportunity to live in close proximity to their workplaces and other amenities, while also providing modern facilities and security features. Another trend in the market is the rise of gated communities. These communities offer residents a sense of exclusivity, privacy, and security. Gated communities often provide additional amenities such as swimming pools, gyms, and recreational areas, making them highly attractive to buyers. The demand for gated communities is driven by the desire for a safe and comfortable living environment, particularly among families with children.

Local special circumstances: El Salvador's residential real estate market is influenced by several local special circumstances. One of these is the country's high crime rate, which has led to an increased demand for properties in secure and gated communities. The desire for safety and security is a significant factor in the decision-making process for homebuyers. Another local special circumstance is the availability of affordable housing options. El Salvador has a large population of low-income individuals and families who are in need of affordable housing. This has created a demand for affordable housing projects and government initiatives to address this issue. Developers are focusing on building affordable housing units to cater to this segment of the market.

Underlying macroeconomic factors: The development and growth in El Salvador's residential real estate market can be attributed to several underlying macroeconomic factors. The country has experienced stable economic growth in recent years, which has resulted in an increase in disposable income and purchasing power. This has allowed more individuals and families to enter the housing market and invest in residential properties. Furthermore, low-interest rates and favorable mortgage lending conditions have made it easier for potential buyers to access financing and purchase homes. This has stimulated demand in the market and encouraged more people to invest in residential real estate. In conclusion, the residential real estate market in El Salvador is experiencing significant development and growth. Customer preferences for modern amenities, safe neighborhoods, and energy-efficient properties are driving the market trends. Local special circumstances such as the high crime rate and the need for affordable housing are also influencing the market. Underlying macroeconomic factors such as stable economic growth and favorable lending conditions are supporting the growth of the market.

Methodology

Data coverage:

Figures are based on total and average value of residential real estate, residential estate transactions and leases.

Modeling approach:

Market size is determined by a combined top-down and bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.