November 2021 Update: Real Estate, Life and Covid
We’ve been getting a lot of questions about how things are in Nicaragua now. So I figured it’s time do another update. This article covers the inter-related topics of life in Nicaragua, Covid, and the real estate market.
Covid
I’ll start with Covid as it’s global ramifications are affecting the other two topics of this article. To enter the country you need a PCR test within 72 hours of your arrival. Check out my blog on that for more specifics.
Once here there are not, nor have never been, government mandated lockdowns or quarantines. Vaccine passports are almost impossible to imagine. The government has neither the inclination nor the ability to monitor it.
Mask requirements are much less common in San Juan Del Sur. The cities have more but you’re probably not spending that much time in Managua anyway.
My opinion is you should be able to choose what to do with your body. I believe if you want the shot you should get it. If not you should be free to decide so. Here you can do that.
With that freedom in Nicaragua you are more responsible for yourself. If you’re a high risk individual you need to be more careful and protect yourself. We have some excellent low cost hospitals and insurance options. But if you are elderly or in poor health you may want to stay where you are.
Locals politely request you respect those who choose to be vaccinated. Letting people make their own choices goes both ways. In the same vein of believing in freedom, they also ask foreigners here to accept private businesses who request masks.
It’s their store, their right to. Just like no shoes, no shirt, no service. Some owners here are elderly and still work in their small businesses.
You can choose who you patronize. I had asymptomatic Covid. I still put on a mask if I choose to enter a store requesting it.
With cheap delivery if you don’t want to mask up to enter a store just get everything delivered. Delivery Mobile here will do all your shopping for a nominal charge. You can get anything I describe in the article on shopping in San Juan Del Sur, plus all the restaurants.
The mask I wear 10 minutes a day doesn’t bother me too much. But I still get groceries often delivered for convenience. The bars and restaurants in San Juan are mask free.
The property market in San Juan Del Sur
Real estate sales have been brisk. There are a few main reasons. A flood of people has been moving to Nicaragua for less restrictions, more freedom, ability to work remotely, low cost of living, territorial tax system, beautiful beaches, surfing, nature, and permanent summer
The aforementioned freedoms have been a big draw - life has been 95% normal here since mid 2020.
Changes in the way people work means many professionals, business owners and entrepreneurs are no longer tied to the office. That’s going to be permanent. Working remotely here is awesome.
For those people there can be enormous tax savings by moving abroad. Check out my article on my other site The Central Investor on why I think more people should consider it
Setting up a corporation in Panama and getting residence in Nicaragua you can reduce your tax rate to as low as 5%. That tax savings combined with a low cost of living means you can keep a lot more of your hard earned money.
Cryptocurrency investors can use a Panama structure to hold and trade. Bitcoin in Nicaragua still is limited to a few forward thinking sellers. But with a Panama corp you can purchase here in Nicaragua by exchanging to fiat for a purchase and smaller amounts for living expenses.
You can also hire help for tasks that you probably don’t like. You can increase the time you’re available to work on your business. Income arbitrage is something everyone should do.
Getting a maid, for example, can take away almost all your cooking and house work for a few hundred dollar a month. Although I would recommend paying above minimum wage here as the small difference to you is life changing for a local. Quality of life in Nicaragua is amazing if you have a “first world” income.
As a result single family home sales have been extremely strong. Many owners of vacation homes have been selling as short term rental income is still way down. The buyers here have been people moving down to live in those homes. So when tourism does bounce back I would expect up-market rentals to do well again as there is less supply in the market.
Buyers have been a fairly even mix of couples, families, individuals and retirees. The first two of those often have one or both partners working online. Families are loving the phenomenal school in town.
These factors have decreased supply of single family detached homes in particular. There aren’t as many left on the market. Although there are still some great ones if you act quickly when you see something you like. Although we do not have an MLS for stats my analysis is that a well priced, high quality single family home is now lasting one to two months on the market as opposed to three to six months in previous years.
Sale prices have been steady. However new listings are coming on the market with slightly higher listing prices. I would expect a slow but steady uptick in values here based on that decreased supply to demand ratio.
As central banks continue to print money inflation is happening. That’s fueled jumps in real estate values in developed counties as those newly minted dollars have to go somewhere. Increased capital is available to Canadian and American buyers who sell or refinance and pull capital. They’ve seen enormous jumps in the home country property values.
Its also driven the cost of building up - raw materials are up 25% this year in Nicaragua, like most countries. Another factor making appreciation on existing homes highly probable.
Commercial properties can still be found at a discount as income at those remains low. I imagine it will be six months to a year before short term rentals increase and that segment demands commensurately higher prices. If you want a hotel or AirBnB property it’s a good time.
Conclusions:
Sales here will likely stay brisk and values will likely increase. Barring a change in the aforementioned factors it seems almost certain. Prices will likely start to slowly tick up as the supply to demand ratio continues to tilt towards the latter.
At the moment existing properties still cost less that building something similar. So if you can find an existing property you like it’s better to buy than build. However if you can’t find one you love, or want your dream home, building lots are still inexpensive on a historical basis. And I can connect you with the best builder in town
Predictions for the future of San Juan Del Sur
Short term tourism will likely remain down for at least six months to a year. I believe that long term San Juan Del Sur will improve as these high income expats (by local standards) move here and capital inflows come into the country.
These stable capital inflows will create jobs, make the town more family friendly and bring in higher end offerings. We’ll see more products and services catering to the people that have already moved here and all the new ones coming. This should also stabilize the previously seasonal nature of the mainly tourist based economy.
When tourism rebounds we will see a more well rounded mix of tourists. Backpackers will return but San Juan won’t have the reputation as a party town. We’ll see a broader range of visitors, including those visiting their friends who’ve recently moved down.
I don’t think that will spoil the towns fun, friendly, funky vibe. We aren’t a cookie cutter community. There’s no McDonalds or Starbucks. The expats moving here tend to be adventurous, open minded and interesting. It’s going to be exciting.
Want to know more about San Juan Del Sur? Contact me!
Joel Stott-Jess
LifeInNica.com
Cell / WhatsApp: +505 8176 8624
US Number: 1 786 753 8743
Skype: joelstottjess
Joel Stott-Jess is a New York Times featured agent / broker in San Juan Del Sur, Nicaragua.
Originally from Alberta, Canada he has been doing business in Nicaragua since 2014.
An investment consultant, serial entrepreneur, surfer, and outdoor enthusiast he is an expert on the real estate and business markets in Nicaragua. He also operates The Central Investor, a real estate and investment blog focused on the entire Central American region.