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US$90,000 for ocean view property in crisis-hit Nicaragua
San Jose, Costa Rica
AFTER 45 years in Texas, retired US military veteran Erick Estrada is looking to snap up some of the world's cheapest real estate back in his native Nicaragua.
For US$50,000, he expects to find a two-bedroom house with a courtyard in Granada, a 500-year-old colonial town with cobblestone streets, on the shores of Lake Nicaragua. The Central American nation was already one of the cheapest places to live in the Americas, but the political turmoil currently engulfing the nation has made it even cheaper.
Nicaragua's political crisis, which erupted in April, has claimed more than 400 lives and forced tens of thousands to flee the country.
US Ambassador to the United Nations Nikki Haley said the Central American nation is sliding towards the type of tyranny seen in Syria and Venezuela.
It's also paralysed an economy which had been one of the region's better performers in recent years. Amid the chaos, investors with a lot of stomach for risk are moving in to buy up assets at knock-down prices.
"As someone who wants to buy, now is the time," said Mr Estrada, 69, who still has family in the country. "Little by little, it will recover."
Real estate values have tumbled at least 25 per cent since the bloody unrest began as homeowners sell at steep discounts in order to leave the country or avoid foreclosure, creating a market for bargain hunters, said Roddy Gonzalez, vice-president of Nicaragua's Chamber of Realtors.
Banks have put the brakes on issuing mortgages, while an increase in squatter invasions of farmland has scared off some buyers, he said.
Venezuela's experience is a cautionary tale of for anyone trying to time the real estate market amid political unrest. Buyers there who tried to buy cheap real estate and hope that things would improve are nursing big losses.
Home prices have fallen between 50 and 60 per cent in real terms since 2015 as the economy collapsed and millions emigrated, according to one realtor who asked not to be named.
In Nicaragua, a two bedroom, two bathroom house built in 2014 on a 6,372 square-foot lot with Pacific ocean views was listed as "half-priced" at US$90,000 on Re/Max's website. A more luxurious beach townhouse at Pelican Eyes Resort in tourist hot-spot San Juan del Sur just sold and its adjacent unit with the same layout is available for a "reduced price" of US$165,000.
By comparison, prices for a parking space in Brooklyn's The Parking Club start at US$185,000. BLOOMBERG