House prices in Belize are now back at or above pre-crisis levels. That’s the opinion of realtor Michel Chebat of M.H. Chebat & Company. In fact, property prices in Belize have risen by 30% to 40% annually in the past two years, according to Jasmine Hartin of SANCAS Realty.

Actually, it is difficult to be sure how much house prices have changed, as there are no official house price figures. However, realtors estimate that house prices declined by as much as 25% to 30% during the global economic crisis. The property rebounded strongly in 2012, and has continued to rise since then.

Outside buyer interest in Belize rose rapidly from 2000 to 2007, partly due to the passage of the Retired Person Incentive Act (RPIA) in September 1999, and to the tourism boom. Tourists flocked to Belize’s natural wonders - beautiful beaches and tropical forests, plus ancient Mayan temples. From 2003 to 2007, property prices in coastal and tourist areas rose by as much as 30% annually, while prices of inland properties rose by around 15% annually, according to local real estate agents.

In 2015, the average price for luxury homes in Belize was less than US$1 million, well below the US$2 million average price of luxury home in some other Caribbean destinations, according to SANCAS Realty.

Ambergris Caye and Southern Belize – Placencia – continue to be the two most popular areas for foreign homebuyers, said Chebat. Ambergris Caye has the most expensive housing in Belize, because tourists and expats are attracted to the beauty of the Barrier Reef. Oceanfront condominium units are priced at about US$500,000, while two- to four-bedroom oceanfront houses are priced around US$1 million.

More affordable houses are found in the south, especially in the Placencia Peninsula and nearby areas such as Sitee River, where residential properties are usually priced 40% lower than those on Ambergris Caye. A two-bedroom oceanfront condominium unit is priced between US$350,000 and US$450,000.

Some expats choose to settle in areas close to the border with Mexico or Guatemala. Corozal Town in the north (bordering Mexico), and the Cayo District in the west (bordering Guatemala) are some popular places for expat retirees. In San Ignacio, Cayo District, the average price of luxury homes was US$500,000 in 2015.

The number of affluent individuals seeking property in Belize increased in 2015, thanks to the relatively low prices of luxury homes in the islands, according to SANCAS Realty.

“Many international buyers are just beginning to discover the potential opportunities of investing in this tiny central American nation bordering the Caribbean Sea,” said Christopher Todd of SANCAS Realty. “Savvy buyers can find tremendous value in Belize, especially on the Placencia Peninsula in the Stann Creek District, and in the Cayo District to the west.”

Most foreign buyers in Belize come from the United States. There are direct flights from numerous U.S. cities, including Houston, Chicago, Dallas, Miami, Charlotte, Atlanta, Los Angeles, and Newark. There is also a growing interest from Canadians, Britons, Italians and Russian investors.

Foreign nationals represent 95% of homebuyers in Ambergris Caye, in the Cayo District, and the Placencia Peninsula, according to SANCAS Realty’s 2016 report.

“The mid-term potential of the Belize real estate market is absolutely phenomenal,” said Todd. “The consensus opinions from our experts all paint a promising picture for those seeking to invest in Belize over the near-term.”

Hon. Santiago Castillo, Belize’s Minister of State for Economic Development, says: “We are extremely bullish on the appreciation value of northern Ambergris Caye over the mid to long term. We expect to see considerable new construction in this area over the next five to ten years as the northern area captures the attention of high net worth individuals and becomes the new epicenter of luxury real estate for the island.”

Most property transactions are done in cash, as Belize’s banks charge high interest rates. The Belizean dollar is tied to the US dollar at a fixed exchange rate of 1 USD = 2 Belizean dollar.

There are no restrictions on foreigners purchasing real properties in Belize.

Belize’s natural attractions

A combination of natural factors – climate, the Belize Barrier Reef, a Caribbean flavor, as well as the Maya ruins - make Belize truly Mother Nature’s best kept secret. Bordered to the north by Mexico, to the west and south by Guatemala and to the east by the Caribbean, Belize considers itself to be both Caribbean and Central American.

Belize has the world’s second largest reef barrier, and its Blue Hole can be seen from outer space. Three of the Western hemisphere’s most breath-taking coral atolls are off the coast of Belize. There are numerous varieties of wildlife shelter in the inlands. Bird watching, nature trailing, and water sports are popular in Belize.

Belize prides itself on being the seat of Mayan civilization. The Caracol, Lamanai and Xunantunich sarcheological sites are well-preserved, and easily accessible to tourists.

Some attractive spots in Belize include:

• San Ignacio Town - has a well-preserved ancient wonder, the Maya ruins of Cahal Pech. The Cahal Pech Village Resort hosts a wide range of adventure tours.
• Caye Caulker - this small limestone coral island off the coast of the island in the Caribbean Sea, is the second largest of the Belizean cayes.
• Toledo – located in the coastal town of Punta Gorda. Tourists love the untouched beauty of the extensive Toledo cave networks, and the rich cultural diversity of Belize offered by interactive lessons in the Garifuna or Creole drumming and dancing schools.
• Placencia Village – offers 16 miles of stunning white sand beaches. It has emerged as a popular eco-destination, offering a host of outdoor activities including deep sea fishing, snorkeling, hiking, and kayaking, among others.
• Hopkins – offers the best access to the Mayflower Bocawina National Park, which has over 7,000 acres of hiking, scenic waterfalls, and Mayan ruins, along with a complex of jungle ziplines. Tourists will also adore the submerged coral structures of the Glover’s Reef Marine Reserve.
• Mountain Pine Ridge in Cayo District – located in the Cayo district, this marvelous pine forest covers over 100,000 acres, and is home to a large variety of wild mammals, including Baird’s Tapir, Belize’s national animal.
• South Water Caye – a beautiful coral island, a hidden treasure for diving and snorkeling. The Blue Marlin Beach Resort offers fly-fishing excursions to the saltwater flats, and a variety of other watersports.
• Dangriga - at the mouth of the North Stann Creek River, Dangriga is the home and cultural center of the Garifuna people. It is also an excellent place from which to launch nautical or jungle excursions.
• Tobacco Caye – is one of the tiniest but most beautiful islands in Belize, perfect for travellers looking for solitude, warm waters, palm trees and a star-streaked sky.
• Turneffe Atoll – a 30-mile long smattering of islands, Turneffe Atoll is known for its incredible diversity of marine life, and was recently declared a marine reserve.

Belize’s real estate hotspots

The most popular destinations are Ambergris Caye and Placencia, which have most vacation and second homes. Corozal and Caye Caulker are also getting attention.

Ambergris Caye has the highest home prices in Belize, with two- to four-bedroom oceanfront houses costing around US$1 million while oceanfront condominium units are priced at about US$500,000, according to Brittany McCann of Belize Sotheby’s International Realty. In La Perla del Caribe, a 3.85-acre villa resort subdivision in Ambergris Caye, a two-storey beachfront villa was priced US$995,000 in 2015.

On the other hand, inland homes are valued substantially less than oceanfront properties, typically priced at around US$200,000.

The number of developments in Ambergris Caye has grown tremendously in recent years. The new ‘Costa del Sol’ area west of San Pedro is just now starting to attract developers and investors. House prices in San Pedro, the island’s main town, are quite high compared to the other parts of the country, although more affordable than other Caribbean islands.

Ambergris Caye was ranked by Huffington Post as one of the top overseas property markets in the world in 2016.

Southern Belize is currently seeing numerous developments. Most are in Seine Bight village and Placencia village. Placencia, a thin, twisted peninsula in the southern Belize, has continued to grow in popularity with foreign homebuyers.

Prices in southern Belize are about 40% lower than those on Ambergris Caye. However, southern Belize prices have risen continously in the past years. A two-bedroom oceanfront condominium unit is priced between US$350,000 and US$450,000, according to Dan Dunbar of CPC Real Estate Solutions. On the other hand, prices of oceanfront lots range from US$150,000 to US$250,000.

“Most buyers want to be near the beach. Ambergris Caye and the Placencia Peninsula continue to spark foreign interest at an unprecedented pace,” said Jasmine Hartin of SANCAS Realty. “New construction in ramping up to meet the accelerating demand and this is also working to drive increased quality throughout the industry.”

Buyers beware! In Belize, there are two prices for everything—the local price and the “rich foreigner” price. Since majority of properties for sale are not advertised, the best way to get a feel of the difference between the Belizean price and the non-Belizean price is to travel to the country and spend time there.

Famous retirement spot

Around 15% of the Belizean population is composed of foreigners, according to International Organization for Migration. Yet Belize is one of the world’s least densely populated countries, currently averaging 14.1 persons per kilometer.

Aside from being the only English-speaking Central American country, and natural beauty, what attracts foreigners, specifically retirees, is the “Qualified Retired Persons” (QRP) program. Similar to Panama’s Popular Pensionado Program, the QRP program gives tax and residency breaks to foreigners with the status of a Qualified Retired Person (QRP). To be designated a QRP under the program, the applicant should be:

• Aged 45 or older
• Citizen of the US, the UK, Canada or Belize
• Earning a monthly income of at least US$2,000 from investments or pensions

Beneficiaries of the QRP status are:

• Exempted from all taxes on income and receipts
• Exempted from all import duties and taxes on personal and household effects upon first importation into Belize (up to a maximum value of US$15,000)
• Exempted from all import duties and taxes every five years on approved means of transport (such as a motor vehicle, boat, or light aircraft)
• Have their dependents included in the program (spouse and children under the age of 18 or under the age of 23 if enrolled in college)
• Can conduct business within Belize, if the business activities are mainly outside the country, and not with Belizeans. QRPs can also own rental properties.

Cayo, Belize was also ranked 3rd on Huffington’s “21 Best Places To Retire Overseas In 2015” while Northern Belize was ranked 4th on U.S. News’ “10 Surprisingly Affordable Retirement Hotspots” in 2015.

Slow mortgage market growth

Belize has a relatively small mortgage market, even though loan-to-value (LTV) ratios range from 60% to 80% of the appraised value of the property, with 15 to 20 year terms.

Reasons for the small market include:

• Little demand for mortgage loans, as few Belizean property buyers meet the financial criteria
• Most buyers pay in cash; some foreigners tap home-country based credit lines
• Only a handful of local and international banks provide mortgage loans, making it difficult for non-resident buyers to get finance from banks
• Mortgage interest rates are higher than US rates, now ranging from 8% to 12%.

Sometimes the seller provides part-financing for buyers at an LTV of 70%, with a term period of 5 to 10 years. The owner typically finances the balance, at rates ranging from 6% to 8%.

Economy slowing, but tourism remains robust

In 2015, Belize’s economy grew by 1.5%, after growth of 3.6% in 2014, 1.5% in 2013, 3.8% in 2012, and 2.1% in 2011, according to the International Monetary Fund (IMF). In Q1 2016, the economy contracted by 2%, in sharp contrast with a spectacular growth of 7% during the same quarter last year, according to Statistical Institute of Belize (SIB).

In June 2016, Belize’s total imports dropped 11% from a year earlier, while exports also plunged 30%, according to SIB.

During the first half of 2016, the number of stay-over visitors in Belize totaled 213,430 people – the first time ever that arrivals exceeded 200,000 people, according to Belize Tourism Board. Cruise ship arrivals also increased, up 2.6% from a year ago.

Unemployment was 8% in April 2016, down from 12% in 2015, 11.1% in 2014, 14.1% in 2013, 14.4% in 2012, and 14% in 2011. Over 8,700 jobs were added in April 2016, according to SIB.

In June 2016, inflation stood at 0.9%, in contrast with -0.8% in the same period last year, based on figures from SIB. Inflation averaged 1.9% from 2000 to 2015.