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BELIZE: EMERGING ISLAND DESTINATION

Belize has long been known as a holiday destination, but with several developments in the pipeline and a robust economy it’s definitely one for investors to keep on their radar.

August 2015

Located on the eastern coast of Central America and with the Caribbean shorelines to the east, Belize combines the best of both worlds. Central America’s youngest nation offers the Maya Mountains, the second longest reef in the world and archaeological sites dating back to AD 250.

Known as a popular vacation hotspot for North Americans, an abundance of real estate developments and eco-resorts is also positioning Belize as an island to invest in.

ECONOMY

According to the World Bank, Belize has integrated mostly with the Caribbean rather than other Central or South American countries, having trade openness greater than its comparators’ average. “The country’s global comparative advantage is derived from its natural resource base, which supports the tourism and agriculture sectors, and its advantageous geographical proximity to major markets,” says the World Bank.

According to the Economic Commission of Latin America, tourism is the sector that receives the most FDI in Belize. Although Belize’s economy has traditionally been oriented toward agriculture, the services sector grew in importance during the 1990s and has been by far the largest contributor, accounting for 60% of GDP. The agricultural sector, which accounts for around 10% of GDP but over 50% of total exports, is dominated by the sugar and citrus industries.

After a moderate recovery from the global financial crisis, GDP growth decelerated in 2013. The economy recovered fairly quickly from the global financial crisis posting average annual growth rates of 3.1% between 2010 and 2012, driven by robust growth in agriculture and tourism.

MARKET OVERVIEW

Home prices in Belize, a large second-home and retirement market for Americans and Canadians, plunged about 25% with the global real estate crisis of 2008, but have since seen a rebound to pre-2008 prices.

With the real estate sector slowly growing the country has become a key emerging island destination along with Panama and Costa Rica according to Knight Frank’s recent Island Report. Brittany McCann of Sotheby’s International Realty in Belize agrees:

“Belize real estate is currently emerging as it steadily attracts a more upscale clientele from real estate investors and developers.  As an English speaking Caribbean country that is within a 2.5 hour direct flight from the U.S., people from all over the world are taking notice.”

“Once investors visit this destination, experience the friendly culture and natural beauty, see the quality homes available and feel confident in the ease of real estate transactions in Belize, they feel confident in their investment choice,” she says.

The prices of real estate in Belize compared to the prices in the eastern Caribbean and in Mexico are significantly lower. “Investors will see the appreciation in their real estate assets as Belize continues to develop. In addition, the property taxes are extremely low, there is no capital gains tax, no estate tax and real estate transactions are relatively easy to complete,” says McCann.

According to McCann, the economy in Belize is stable and growing. It is impacted significantly on by the U.S. market trends as most investors come from the U.S.

“As the U.S. real estate market improves, more investors come to Belize for second home and vacation home investment. Many are also looking to diversify their investment dollars and Belize is a safe place to invest. Property in Belize will continue to appreciate in value as more investors are attracted and larger, quality developments are built,” says McCann.

CURRENT DEVELOPMENT

Direct contribution of travel and tourism to GDP is expected to grow by 4.4% per annum to USD 345.28 million (16% of GDP) by 2024. This acts as an engine for the hotel industry, and in fact, many developments in Belize are run by celebrity hoteliers.

“In April earlier this year American actor Leonardo DiCaprio announced that along with a very impressive team, they are developing Blackdore Caye into a luxury eco-resort where 48 private estates will be sold for USD 5,000,000 to USD 15,000,000. The island is located a few miles to the west of Ambergris Caye. This development will incorporate ecologically conscious technology, wellness and sustainability. It will set Belize on a world stage for cutting-edge development,” says McCann.

Blackdore Caye will feature luxury resorts, with sprawling villas. The development has garnered world-wide publicity and is expected to open in 2018. DiCaprio is the latest in a string of celebrity owned developments; others include Francis Ford Coppola.

In addition, the first-of-its-kind master-planned community is being built in the country. Kanantik Belize is a new, private 5,800-acre gated community slated to open in 2016. The resort is ranked as No. 1 in Central and South America by Condé Nast Traveler as well as the Travel Channel’s 72nd Sand n’ Surf Hotspot destination in the world. The development models sustainable, eco-sensitive designs and once completed will offer a private gated community with 2,800 residential home sites and 300 beachfront condominiums.

Furthermore, according to Sotheby’s Belize, infrastructure on the island of Ambergris Caye is gaining significant improvement. Over the last several months a concrete road was constructed from San Pedro Town to 3.5 miles north of town. Construction is currently in progress from 3.5 miles to 8 miles north. “This will not only create access to properties that were only accessible by water, but will also raise the property values of the non-beachfront properties along the new paved road. In addition, there is a sewer and water project set to begin in 2016, to bring these services to the northern part of Ambergris Caye,” says McCann.

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