It’s hard to find a nation that has not been affected by the current pandemic in one way or another. The disruption of life as most of us have experienced has led to economic changes that will take years to reverse. Even if areas where relatively few cases are occurring, these effects can also require some changes to future business forecasts.
That’s true when it comes to the real estate market in Belize. The projects for 2020 that were made last year aren’t relevant any longer. Where does that leave the market in general, and buyers in particular? Here are some thoughts on what’s happening and how the market in Belize will function between now and the end of the year.
The Impact of COVID-19 on Tourism and Travel
Belize is a nation that derives much of its income from tourism. Under the current circumstances, travel in and out of the country is curtailed. This is part of the effort to prevent the development of large numbers of cases. So far, the country has been able to minimize the number of people who become infected, indicating that the decision to temporarily close the borders in the majority of instances has proven effective.
In the interim, there is speculation about what will happen next. Will the hotels be able to keep staff employed? What about businesses like restaurants and tour services? Will they be able to get by during a year when business volume will be much lower? Those are questions that just about everyone is wondering about.
What Current Commercial Property Owners are Facing
Some owners of commercial properties are managing in the short-term. That’s especially true if the businesses operating on those properties are continuing to provide services to residents. While the business volume may be lessened, it’s still enough to sustain the operation.
The result is that some commercial properties will appear on the market. As the year progresses, expect some of those properties to be offered at prices below the estimated market value at the beginning of 2020. If the current owner considers a loss now as the most prudent way to get by until things are better, the asking price may be significantly lower.
The Residential Market Now and in the Months to Come
Owners of residential properties are also feeling the pinch. In some cases, the owners no longer have jobs and are getting by with savings and other resources that may or may not be enough to get through the rest of the year. Even with the aid of unemployment funds and food assistance, some may be worrying about how to continue paying mortgages or rental fees.
This could lead to some homeowners deciding that now is the time to sell and put the mortgage to rest. While this still leaves the issue of finding a place to live, or possibly paying rent to the new owner, this solution could result in a reduction of expenses in the short-term and make it easier to stretch the limited funds that the homeowner has left.
Deciding to Buy Property Now: Yes or No?
What does this mean for those outside the country who are thinking of investing in Belize real estate? On the surface, it seems to be the ideal time to come in and purchase properties while they are being sold at below market value. In fact, that’s exactly what some investors will do. In some ways, this will help the economy since those new mortgages are likely to be financed through a bank with a presence in Belize.
The thing to remember is that not all properties will be sold at a loss. Depending on where the property is located, the demand could still be significant. For example, property in Ambergris Caye is not likely to see much in the way of depreciation. Those properties may even appreciate in value.
An investor who is in a position to buy these properties in more desirable areas and absorb the short-term loss could do quite well in the years ahead. Others who need some sort of return sooner or later will need to look in other parts of the country or simply wait.
There is no one right answer for every investor. This is true even though it’s expected that the market value of properties will once again appreciate uniformly once the pandemic is over. While it’s worth taking a look at what’s available, each investor will have to determine how long it’s possible to hold an asset and wait for it to appreciate.
Working with an Agent
Some investors may be put off by the idea of not being able to visit the properties before making a decision. Fortunately, it’s always been a good idea to work with an agent and an attorney to acquire property. In fact, Belize has long allowed international investors to purchase property without having to be physically present in the country.
There are still ways to find, review, and ultimately submit offers for properties. Thanks to the use of video conferencing in an online environment, it’s possible to take virtual tours of residential and commercial prospects. The same tool makes it possible to conduct virtual meetings with property owners, agents, attorneys, and lenders. In short, the tools to manage the purchase are there and ready for use.
Exploring Financing Options
If you’ve decided that you’re in a good place financially to move ahead with property acquisitions in Belize, do find the type of real estate you want and compare pricing. While you’re at it, approach lenders who have a presence in the country and begin the application process. Even with the pandemic, the time frame for closing is much like it was in the past. In a matter of weeks or months, you could be the new owner.
Remember that many banks in Belize offer more than one type of real estate loan. Review the features of each option and see which one works best in your case. That will make it all the easier to manage the mortgage for the remainder of the year and as the world moves closer to the day when COVID-19 is under control.
The choice is yours. If owning property in Belize has long been a dream, don’t give up. Even if the timing is not ideal for you right now, monitor the movement of the market. Both your circumstances and the pricing in the market could improve before the year is over.
I hope you enjoyed reading: The Real Estate Market in Belize: What Does the Rest of 2020 Hold? If you would like information on Belize and how you can move there, please contact our office HERE, we will be happy to assist you. I’ve also included a few additional articles on Belize that I know you will really love! Enjoy!
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank, a FinTech School Instructor, and the published author of The Digital Banking Revolution – now in its third edition. You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege
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