source: TimesOnLine
Is Latin America really a property hotspot?
Caution is required before embarking on a Latin love affair
If ever there was a time to invest in an exotic home in Latin America, this is it - or so the sales pitch would have it. The region is being touted as the one most likely to emerge unscathed from the current economic turbulence, with luxury new developments aimed at foreign buyers in the most unlikely locations under the sun.
One developer in Nicaragua, the Central American country emerging from the shadow of civil war in the 1980s, is tapping into investors' fears of the stock market by promoting oceanfront property as the best type of investment to ride out the financial storm. Kevin Fleming, the founder and chairman of Grupo Mariana, says: “We believe Nicaragua is now where Costa Rica was when it began to focus on tourism and development. It offers the same type of potential for outstanding returns over time.”
Properties at the vast Seaside Mariana Spa & Golf Resort, which is spread over 923 acres, range from $227,820 (£154,000) for an off-plan one-bed flat to $709,920 for a villa on a golf course designed by Jack Nicklaus. Fleming says that Phase I is already sold out and should be completed by 2011.
These property prices are not rock bottom. But are properties such as these good value? Will investors reap handsome returns by diverting their cash from stocks and shares into Latin American property? One of the main problems about investing in property in the region is the lack of objective and consistent data on house prices. There is no equivalent to the Land Registry.
Fleming says: “The real-estate market in Nicaragua has experienced constant and consistent growth over the past five years, with serviced plots in primary real-estate areas increasing by close to 300 per cent, on average, since 1997.” His figures come from Calvet & Associates, an organisation whose aim is to boost tourism and investment into Nicaragua.
In general, Latin American banks did not snap up the American mortgage-backed securities that caused so much trouble in the US and Europe, mostly because strict regulations in countries such as Brazil - the biggest economy in the region - prohibit such investments. And fears of a return to the recent era of hyperinflation keep interest rates relatively high. In Brazil the base rate is 13.75 per cent and the cost of borrowing to consumers is expensive - credit card rates are 230 per cent.
However, to say that the region is unaffected by the economic downturn would be deeply misleading. The World Bank recently lowered its 2009 growth forecasts for Latin America from between 4.2 per cent and 4.6 per cent to between 2.5 per cent and 3.5 per cent. The region's exporters are suffering from falling commodities prices and difficulties in obtaining credit from foreign banks. Also, over the past five years prices in so-called luxury developments, which had been rising at breakneck speeds, were mostly driven by foreign purchasing power rather than local factors.
Mexico has been particularly badly affected by the fall in remittances from its citizens working in the US. Charles Peerless, a director at Winkworth International, who is selling flats in Reforma 90, a 38-floor tower in the business district of Mexico City, says: “There is more stock being offered and demand is coming down. I haven't sold anything in eight weeks.”
In northeast Brazil, Sílvio Bezerra, the director of the construction company Ecocil and president of Sinduscon (a syndicate of builders in Rio Grande do Norte), attributes the fall in property prices to the retreat of international investors. “I don't think there is anybody left to buy and if there are no gringos to pay, prices will fall to more realistic levels,” he told Diário de Natal, a local newspaper.
Harry Lewis, a director at Savills International, says: “The whole world has been affected by the credit crunch. Projects in Brazil, Argentina and Costa Rica have gone back to the drawing board because buyers are no longer prepared to pay the prices they were modelled on.”
But Felipe Cavalcante, chairman of Adit Nordeste (Association for Real Estate and Tourism Development in Northeastern Brazil), says: “Had the economic crisis not occurred, the chances are that the market would have been flooded with new projects in 2009 and 2010.” It had also purged the market of “adventurers and speculators”, leaving only “serious companies that are well structured”. Cavalcante argues that the prospects for the Brazilian property market are good in the long term. “We have a shortfall of 7.9 million homes and we have to build over 1.4 million homes a year simply to keep up with the current housing levels. By 2030 there will be 35 million new families needing housing.”
The Brazilian real is down against the US dollar, making property prices in Brazil even cheaper than before. Throughout Latin America struggling developers will probably be open to low offers to make their balance sheets work now that most foreign buyers have evaporated. That said, investors should look very closely at the quality of the development and the health of the local market. After all, that is exactly what you would do if you were buying at home.
Seaside Mariana Spa & Golf Resort:
0800 0727292, info@seasidemariana.com
Paradise gets the green light
Holiday homes abroad are becoming increasingly ecofriendly, says Helen Davies
It is a tough dilemma. You’ve swapped all your conventional light bulbs for energy-saving ones, traded in your gas-guzzling 4x4 for a hybrid and put your name down for an allotment, but what if you want to own a house in the sun?
Since the publication of Sir Nicholas Stern’s apocalyptic report on climate change last October, being green has become mainstream; everyone seems to be counting their carbon emissions these days. Suddenly, the dream of buying — and then travelling to and from — a foreign bolt hole doesn’t sit quite so easily as it once did.
There is little doubt the number of second homes will keep on rising: the government estimates as many as 300,000 Britons own a property abroad, although some surveys put the figure closer to 1m. But other than cycling off to a property in Belgium or investing in a yurt in Mongolia, can you still go abroad and be green?
Yes, insist developers who are marketing ecofriendly resorts specially tailored to salve the conscience of the environmentally aware. “People like to see rainwater properly harvested and recycled, especially if there is a golf course,” says James Davies, director of residential development at agents Hamptons International.
“There is a move towards solar power, grasses that don’t need so much fresh water and bio-gas regeneration, where any vegetation chopped down is burnt to heat water for showers and baths.
“Environmentally friendly resorts are the way forward. In five years, geothermal heating and self-sufficient organic farms will be the norm. Some developments may even insist on owners proving their carbon-neutral travel arrangements.” Already one developer, Jet2let, has announced car-bon-neutral inspection trips to their developments in Bulgaria.
Twenty years ago, Andre Jordan was laughed at for introducing bird boxes around the Quinta do Lago golf resort in the Algarve to attract wildlife, as well as to reduce the number of mosquitoes. Today, the greening of the holiday-home market is gathering pace. But whereas technical details such as solar panels, “grey-water” harvesting and chlorine-free swimming pools used to be glossed over, now they are high-lighted in the sales brochure.
Take Pezula, a 1,500-acre site perched on a clifftop near Kny-sna, on South Africa’s Garden Route. The developer is keen to stress its green credentials; there are plans in place to regenerate local plants and wildlife, and no new roads. It also has an independent Environmental Liaison Committee of experts. “Environmental strategy takes precedence over marketing strategy,” claims a brochure for the site, before adding, “but encouragingly, this seems to have made Pezula a resounding sales success.”
“Nothing is wasted,” says Jes-sica Hayes, environmental manager at Pezula. “For example, waste timber of no use to the site is provided to disadvantaged locals for a wood-chopping business. The firewood is then sold to the public.”
Sixty plots are still available at the Pezula resort, where prices range from £92,000 to £284,000, to build your own ecofriendly home. All building works must be approved by the environmental board at the resort, use natural, local building materials, and must have a minimum 4,000-litre rainwater tank (Pezula, 
00 27 44 302 5332
, www.pezula.com).
Not surprisingly, Sir Richard Branson, who, together with former American vice-president Al Gore, is offering a £13m reward to the scientist who discovers a “cure” for climate change, is also getting in on the act. Earlier this year, the billion-aire entrepreneur paid £10m for the 120-acre island of Moskito, in the British Virgin Islands, where he plans to build the world’s first eco-resort, complete with a wind farm, organic farm and electric cars, by 2010.
This greening of the holiday-home market does not come as a surprise to Charles Weston Baker, head of international residential sales at Savills. “Put quite simply, you don’t want to destroy what is your selling point,” he says. “To some extent, the boom in ecofriendly resorts has grown in line with the growth in emerging markets.” For that reason, some of the most ambitious projects under way are in developing countries such as Thailand, Cape Verde, India, the Seychelles and the smaller Caribbean islands, which often attract foreign buyers who are more environmentally aware and keen to maintain the unspoilt nature of their chunk of paradise.
Some, such as Pezula, are modestly priced. Others, such as the Soneva Kiri resort in Thailand, near the border with Cambodia, are aimed unapologetically at the luxury end of the market. Developed by Sonu Shivdasani — who was at Oxford with David Cameron and still counts him as a friend — and his Swedish wife, Eva, a former model, the complex aims to be carbon neutral by 2010.
Set in more than 100 acres of lush rainforest on the island of Ko Kut, accessed only by speedboat, the 36 villas are to be built of locally grown eucalyptus and makka wood. The emphasis is on eco-chic: energy-saving measures such as a grey-water system and state-of-the-art glazing have been incorporated into the design.
None of this comes cheap, however: prices for three-bed villas, all with showers created from recycled glass blocks — and personal butler service — start at £1.53m (through Savills, 
020..., www.savills.com). The Shivdasanis are planning similar ecofriendly resorts in Mexico, Belize, Panama and Guatemala.
For many developers, it is not enough to be kind to the planet. They also want to be seen to be putting something back into the local economy. Among them is James Kellow, a director of A Life Extraordinary, a company that develops eco-lodges (from £78,000 to £217,000) in Belize, central America, that promise an investment “in the planet’s future, while still providing a sound financial return”.
Set in the jungle, each eco-lodge at Belize Grove (020..., www.belizegrove.com) will be built of sustainable timber. The resort also aims to be “socially sustainable”, with a rental pool to encourage owners to let out their properties when they are not there, and jobs for the locals. “Gated communities can bring about resentment,” says Kellow. “Overdevelopment has created ghost towns in parts of Spain and Florida when they have been deserted by the travel and tourism industries.”
A similar philosophy governs the Kittitian Hill resort, a development of 106 villas, 74 flats and 54 cottages being built on the Caribbean island of St Kitts by Terra Forma Developments. “We are not talking about fencing, we are not talking about blocking off roads and we are not talking about security guards stopping everyone getting into this resort,” Valmiki Kempadoo, the Trinidad-born managing director announced at the launch last month.
So, as well as the obligatory golf course and spa, Kittitian Hill will have a Saturday market where locals can sell their wares and a shared restaurant for hotel staff and guests. There are also plans for an off-site wind farm. Prices start at £170,000 (Resort Group International, 020..., www.kittitianhill.com).
Some of the greenest second homes are to be found not in far-flung destinations, but closer to home — and you will do less damage to the environment getting there. In September, Savills will launch a carbon-neutral development in Montenegro — a first for the former Yugoslav country. The Tara Mountain Village near Kolasin will be fuelled by hydroelectric power and geothermal heating, and have an organic farm producing fresh milk and eggs for the farm shop. Homeowners will be invited to travel around the resort via skis, electric car or pony.
Vying with it for the green crown is the Mata de Sesimbra project in Portugal, which aims to be the world’s first integrated sustainable-living programme, and includes 8,000 zero-carbon holiday eco-homes. Located south of Lisbon, it will use sustainable materials that will reduce domestic carbon emissions by at least 30%, while low-flow taps will cut water consumption by half. The development will be powered by solar energy, and cars banned from the centre; instead, residents will be provided with free bicycles. A one-bed flat in Mata de Sesimbra (www. oneplanetliving.org) costs about £60,000 and a large five-bed villa £600,000.
There is no exact science to determine just how green any eco-resort is — although an endorsement by organisations such as One Planet Living, Natural Step and Green Globe, which promote the building of sustainable communities, provides a good benchmark.
So much for your conscience. But are you also paying a premium for living in such a development? Not necessarily, says Weston Baker. “As with many green applications, the cost is greater upfront. The pay-back comes over the long term. People only do things if it is in their interest. But so far it isn’t stopping anyone buying abroad. They are just looking for a greener home once they get there.”
So, tempted to buy a green home of your own? Here are some of the other more interesting ones out there.
Brazil: The Reef Club (Qualta Resorts, 
00 34 95..., www.qualtaresorts.com.br) near Pernambuco in northeastern Brazil, due to be launched next month, is billed as an “eco-community” of more than 4,000 homes, built using sustainable woods in and around lagoons and mangrove glades. Solar power will be used for hot water, pumps and lighting. The 18-hole golf course will be irrigated by a rainwater storage system and waste-recycling plant, and only biodegradable detergents will be used on site. Prices start at £98,000 for a two-bed, two-bathroom cottage. It is estimated the project will generate more than 3,000 jobs for the local community.
Canada: A former mining town, the Three Sisters Mountain Village, just over one hour’s drive from Calgary airport, is being transformed from an industrial eyesore into a 2,000-acre alpine resort. It stands at the foot of the Rocky Mountains, and more than half the site is left to wildlife. Owners are encouraged to leave the hire car in the garage and to walk, cycle or ski. Prices start at £248,000 for a two-bed flat, up to £2m for a five-bed house (Newfound Property International, 020 8605 9520, www.newfoundproperty.com).
Cape Verde: Sambala Developments, which is developing a resort on Santiago island, sponsors a local marine-biology institute and is involved in a project to supply computers for the local school. “We are setting a benchmark in responsible development,” says Jim Campbell, marketing manager. A typical three-bedroom townhouse in the resort with use of communal pool costs £135,000 (016..., www.sambaladevelopments.com).
Mexico: Phase one of the Campeche Playa resort will not be completed until the end of 2008, but properties are already for sale on the 760-acre site, the only one to be granted permission on Mexico’s virgin coast (also a breeding site for hawksbill sea turtles). Prices for flats in phase one, a seafront site, range from £140,000 for a two-bed flat, up to £309,000 for the three-bedders (Pure International, 020..., www.pureintl.com). Portugal: Some 167,000 trees have been planted at the Parque da Floresta resort in the western Algarve, where residents can enjoy a round of golf knowing their golf buggies run on electricity rather than petrol, 25% of the sewage water is reused and most of the energy is supplied by wind turbines. Two-bed townhouses in the latest phase overlooking the front nine holes start at £274,000 (contact Vigia Property Sales, 01223 316820, www.parquedafloresta.com). Three-to five-bed villas with private swimming pools (cleaned by salt water) start at £450,000.
Hamptons International, 020 7758 8447, www.hamptons-int.com;www.oneplanetliving.com; www.greenglobe.org; www.naturalstep.org.uk
For more ideas on how to go green, see timesonline.co.uk/greenhouse
Offsetting the damage
Your new property may be awash with self-composting solar panels and turf-coated water-butts, but will all that environmental effort be wiped out by the impact of the flights you need to get there? Airline travel is the fastest-growing source of greenhouse emissions in the UK, and already accounts for between a third and a half of the average Briton’s discretionary carbon footprint. Not only does powering several thousand tons of aluminium, cargo and complimentary snacks through the air require huge quantities of fossil fuel, but the resulting carbon emissions are also deposited, unhelpfully, directly into the upper atmosphere.
One possible remedy is carbon offsetting. A number of companies will help you calculate the impact of your flight, then charge you a suitable fee to undo the ecological damage. So, either enough trees will be planted to absorb the pesky carbon dioxide, or your fee will be used to fund carbon-reducing endeavours around the world, ranging from providing low-energy cooking stoves in Indian villages to building wind farms in the USA. It seems the perfect guilt-free solution.
There are, however, some hitches. Many environmental groups oppose offsetting on principle, saying it’s a distraction from the need to change our behaviour — “Donating to the RSPCA so you can keep kicking your dog” is the favourite dismissal — and pointing out that when all those trees die, they’ll release their carbon again. Furthermore, the booming carbon-offsetting industry hasn’t always covered itself in glory.
Calculations of the carbon cost you need to pay vary wildly. If you have a property on the Côte d’Azur, for example, your return flight to Nice could be responsible for anything from 240kg carbon per person to 600kg, depending on which company’s website you visit — requiring you to pay from as little as £1.84 per person to offset the impact, or as much as £6.45.
The UK’s five leading offsetting firms produced five different estimates for this journey. The offsetters have also hit trouble over projects in the developing world, some of which have run into red tape, waste and confusion. In one particularly bleak example, a Norwegian firm tried to displace 13 villages in Uganda so it could plant a guilt-free forest.
If carefully and transparently managed, though, offsetting does garner rave reviews — the Climate Care Trust (www. climatecare.org) is probably Britain’s most respected operator, with supporters including the World Wildlife Fund and Jonathon Porritt’s Forum for the Future. Of course, these campaigners would still prefer it if you took the train — catching the Eurostar, then the TGV to Nice releases just 36kg of carbon per passenger — well within your luggage allowance.
Brian Schofield
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British investors are slowly discovering a low-cost coastal paradise, finds Susan Emmett
I am not sure if this is the right website in relation to global warming which R Branson is strongly invovled in but here is my suggestion. The world is starting to show signs that are very worrying ie ice caps melting,freak weather and at this moment in time Australia suffering its worst drought.Would it not be possible to build desalination plants around all countries of the world, as they have in the middle east,this would surely serve two purposes help with rising water levels and help countries like Australia and Africa from suffering terrible droughts,it would help with farming in the future which is going to be a major problem in years to come.
George Lockwood, enfield middlesex, england
re: the article on green suites in the world, whether far or near, these that you write about seem to be for someone who is still demanding everything and will pay their way around the damage they may do to get their wish. if we live simply, sit, walk, have a garden, strech or do yoga, site your SMALL house to collect optimal passive solar rays in the winter. most of us know what to do. now it's showtime, and if we show well, i believe we'll feel good. isn't that a good start?? cheers bob
bobmackasey, halifax, canada