Property listing portal Reveal Real Estate has been studying the international real estate and tourism markets in Central America for the last decade. “Our key learning” says co-founder Jane Bakerson, “Is that tourism and residential real estate markets are closely linked. Not only do growing tourism numbers bode well for the real estate market, but the prime tourism spots also quickly emerge as the top purchasing hotspots.
It’s a cycle that is playing out clearly here in Nicaragua. The two main tourism towns, Granada and San Juan del Sur are also the two most important real estate investment areas. In fact there are more real estate developments catering to international buyers located in Nicaragua’s tourism heartland area (the south west of the country on the pacific side that also includes Ometepe, Crater Lake Apoyo, Lake Nicaragua, the “islets” and Mombacho volcano) than the rest of the country combined. A recent study revealed for example that over 70% of beach-side real estate communities are located between El Astillero and the Costa Rican border – an area that only makes us around 1/8 of the entire coastline – (and of course and even smaller fraction if one were to include the Caribbean coastline in the calculation.)
Seeking Nicaragua real estate listings in tourism areas not only caters to “speculator investors” who purchase in the hope that tourism and infrastructure will arrive in a location, but also to the so-called “lifestyle investors” looking for an existing community and an opportunity to rent out their property to visitors. This whole relationship is further boosted by the fact that tourism areas are often the most attractive parts of the country – places with the kind of inherent value that real estate investors are attracted to.
This concentration of real estate and tourism activity in Nicaragua and other Central American countries has important social and environmental implications which need to be monitored closely. I have listed three of them below:
- Lax real estate developers can undermine the environmental integrity of key tourism areas if their projects don’t take into account sustainability principles.
- Infrastructure provision can be severely tested in the more remote tourism areas that are getting the attention of real estate investors.
- Without an overall water management plan there may simply not be enough water to fill all the swimming pools and golf courses that are being planned by ambitious real estate developers.
The trends are clear, now the development community needs to come together with the tourism ministry to seek a sustainable way forward that balanced economic capital with social and environmental concerns. I have no doubt that bodies such as the WTO and this site have best practice case studies available that could serve as a good starting point.