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Stalled property market in Nicaragua set to pick up

Land and building costs are cheap and although the property market is currently stalled, mostly due to US investors deserting the country, the opportunity to get in early exists, according to Ronan McMahon of property search consultancy Pathfinder Ltd.

'Along the southern Pacific coast of Nicaragua are rocky outcrops and pounding surf. The ocean views are magnificent. The surf and swimming beaches are world class, there is so much potential,' said McMahon.

He believes that investors are currently ignoring Nicaragua for two reasons. First, the election of Daniel Ortega was followed by a nervous 'wait-and-see' view of the market. The second blow came from the subprime crises and fears of recession in the US.

'The real estate market in Nicaragua was dependent on US investors who rapidly dried up. The market stalled,' he said.

The government is now relatively stable and has been investing in the future. Money is being put into improving airports and roads. Property costs a tenth of what it would cost across the border in Costa Rica and other South American countries except Brazil.

'As a real estate investor, I ask myself what will happen next for Nicaragua's property market. Very little this will happen this year, in my view. But the market will come back. The question is when. Real estate like this can't stay undervalued forever,' added McMahon.

'It's difficult to predict what will happen in the next few years, but I imagine five to seven years from now prices in Nicaragua's southern coast will match those on Costa Rica's northern coast. If you are looking for a quick flip, this market isn't for you, but it's ideal for long-term value or as a pure lifestyle purchase.'

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