A Guide to Belize Real Estate Value Appreciation
Generally, the term “appreciation” has a positive connotation whether it be the appreciation of a person or the appreciation of value. In Real Estate, “property appreciation” refers to the value of real estate increasing over time, this is largely due to an increase in demand for that property. As real estate becomes more scarce but is still in demand, the price for it increases. Real Estate appreciation (like to what has been seen in Belize) is an increase -in value of real property.
When a property “appreciates” in value the effect is that you have greater equity in the asset, and a greater profit can be obtained upon sale. When a property or real estate appreciates in value, it can be influenced by a number of factors, which include: inflation, scarcity, infrastructure development, community or municipal improvements and positive changes a country’s economy.
Inflation is often the most common reason for an increase in property value. However, inflation is also the least beneficial factor for the real estate appreciation of the property owner. With inflation comes and increased cost of living, which erodes any gains that would of come from the properties value. Another common reason for property appreciation is scarcity. Scarcity is similar to inflation as it is usually noticed (or acted upon) too late. For example; think about the abundance of beachfront property for sale on Ambergris Caye 10 years ago. Today there is about a tenth of as many oceanfront lots are for sale as there were then. When there is not enough high-demand real estate to go around, the price goes up. Simple supply vs. demand.
Another factor in the appreciation of property value in Belize and the island of Ambergris Caye is infrastructure improvements. As each change to the municipal or community infrastructure occurs (roads, utilities, new homes), neighboring property owners see positive property value appreciation. Values in the Secret Beach area of Ambergris Caye are seeing an upward swing that far outstrips any inflationary trends because there is a real physical change for the better. The rapid growth in Belize and the increase in tourism demand are leading to more infrastructure projects, which leads to a rise in property value.
Belize is a country that has seen the start of real estate appreciation over the last decade. Belize is one of the Caribbeans most popular real estate markets and has become a jewel for buyers, sellers and investors. The real estate appreciation in Belize makes it a smart investment, whether you are looking for retirement, residency or capital gains. There are many factors that can influence real estate value in Belize; the following is a closer look at the primary factors and causes behind value appreciation for real estate property located in Belize.
Real Estate Value Appreciation
First, it’s important to know what real estate value appreciation means. In the real estate market, value appreciation refers to the increase in the value of a tangible property. When a property that you own begins to appreciate, you will have higher equity that you can borrow against, which in turn results in a higher profit when you decide to sell your property on the market.
Impacts on Belize Realize Estate Value Appreciation
There are many different factors that can influence real estate appreciation. One of the primary factors that have attributed to the real estate appreciation in Belize has been the infrastructure improvements in the area/neighborhood over recent years, The improvements in nearby properties and homes, improved infrastructure developments, economic inflation, and increased scarcity of property in the area has led property values on Ambergris Caye to rise.
In Belize, all of these factors play a role in property value appreciation; in recent years, however, scarcity, as well as improvements in infrastructure and surrounding neighborhoods and homes, have played the most significant roles in property value appreciation. Increased scarcity is one notable factor that causes value appreciation in Belize, particularly in popular areas such as Ambergris Caye. Within the past few years, as more and more people chose to invest and/or retire on Ambergris Caye, finding property for sale has become more difficult. The increased scarcity has allowed people to raise prices of property on the market, resulting in more profits for sellers.
In addition to scarcity, overall improvements in various areas, neighborhoods, and infrastructure in Belize have led to significant value appreciation. Improvements to roads (like the one leading to Secret Beach), makes communities more accessible, the accessibility has made many areas of Belize which were once unpopular in the real estate market much more valuable today.
When investing in a foreign or emerging market the quality of life is a critical factor in “appreciation.” In Belize, the government has done its part, providing facilities and services that individuals cannot provide for themselves. For example, the roads leading the Secret Beach or the new water and sewage treatment facility have both helped to improve the quality of life in San Pedro.
Although all of these factors can cause an appreciation in value, not all of these factors are ultimately beneficial for the person selling the property. This is especially true for people selling a residential property before they purchase a new residence for themselves. For example, inflation is a highly common cause behind appreciation; but inflation typically comes with an inflated cost of living in the area, which means that while you may sell your initial property for more money you will have both a higher cost of living and a higher cost for the new property you want to buy.
A lot of real estate investors keep an eye on the future. Forecasting development, infrastructure, and demand is essentially the objective of any real estate investor. A smart investor may wish to buy property in an area where there is anticipated development which will cause positive appreciation.
As Wayne Gretsky famously said “Skate to where the puck is going, not where it has been.” If you plan to buy or sell Belize real estate in the near future, make sure you keep value appreciation—especially as it relates to Belize real estate—in mind.