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Residential Real Estate Transactions - Central America

Central America

In Central America, the market segment for Residential Real Estate Transactions market is anticipated to witness significant growth.
By 2024, the transaction value is projected to reach US$8.42bn.
Furthermore, it is expected that this market will experience a compound annual growth rate (CAGR 2024-2029) of 4.51%.
This growth will lead to a substantial increase in the market volume, which is anticipated to reach US$10.50bn by the year 2029.
In Costa Rica, the residential real estate market is experiencing a surge in demand due to its stable economy and attractive investment opportunities.

Key regions: Germany, Europe, Asia, United States, United Kingdom

Market

Region

Region comparison

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Analyst Opinion

The Residential Real Estate Transactions market in Central America has been experiencing significant growth in recent years.

Customer preferences: Customers in Central America have shown a strong preference for investing in residential real estate. This is due to several factors, including the stability of the market, the potential for high returns on investment, and the desire for homeownership. Additionally, many customers in Central America see real estate as a safe and reliable investment option, especially compared to other forms of investment such as stocks or bonds.

Trends in the market: One of the key trends in the residential real estate market in Central America is the increasing demand for luxury properties. Wealthy individuals from both within and outside the region are investing in high-end residential properties, particularly in popular tourist destinations such as Costa Rica and Panama. This trend is driven by the desire for luxury living and the potential for rental income from vacation rentals. Another trend in the market is the growing popularity of eco-friendly and sustainable properties. Central America is known for its natural beauty and biodiversity, and customers are increasingly seeking properties that align with their environmental values. This has led to the development of eco-friendly residential communities and the incorporation of sustainable features such as solar panels and rainwater harvesting systems in new construction projects.

Local special circumstances: One of the unique aspects of the residential real estate market in Central America is the presence of foreign buyers. Many individuals from North America and Europe are purchasing second homes or retirement properties in countries such as Belize and Nicaragua. This influx of foreign buyers has contributed to the growth of the market and has also led to the development of expat communities in certain areas. Another special circumstance in the market is the presence of gated communities and condominium complexes. These types of properties are popular among both local and foreign buyers due to the added security and amenities they offer. Gated communities often include features such as swimming pools, fitness centers, and 24-hour security, making them attractive options for individuals and families looking for a safe and convenient living environment.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of the residential real estate market in Central America. One of the key drivers is the region's strong economic growth and political stability. Central American countries such as Panama and Costa Rica have experienced steady economic growth in recent years, attracting both domestic and foreign investors to the real estate market. Additionally, low interest rates and favorable mortgage conditions have made it easier for individuals to purchase residential properties. This has increased demand and stimulated growth in the market. Furthermore, government incentives and policies aimed at promoting the real estate sector, such as tax breaks and streamlined administrative processes, have also contributed to the development of the market. In conclusion, the Residential Real Estate Transactions market in Central America is experiencing significant growth due to customer preferences for residential real estate investment, trends such as the demand for luxury and eco-friendly properties, local special circumstances including the presence of foreign buyers and gated communities, and underlying macroeconomic factors such as strong economic growth and favorable mortgage conditions.

Methodology

Data coverage:

Figures are based on total and average revenue of residential real estate transactions (sales).

Modeling approach:

Market size is determined by a 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 considered at a country-specific level.