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Everything you need to know is included in our Guatemala Property Pack
Are you considering buying real estate in the land of Mayan Ruins? Are you pondering if it's the right time to make a move?
Market timing is a subject where opinions vary among individuals. Your Guatemalan acquaintance might suggest that now is the opportune time to buy property, whereas your spouse, who is originally from Guatemala City, might have a different view and recommend waiting for more stability.
At TheLatinvestor, when we create articles or update our pack of documents related to the real estate market in Guatemala, we rely on reliable data and statistics instead of personal opinions or rumors when we work.
We've done extensive research on official reports and government website statistics, resulting in a comprehensive database. Here's what we've learned, which can provide valuable insights for your decision-making process regarding real estate purchase in Guatemala.
Have a nice read!
How is the property market in Guatemala now?
Guatemala is, today, a relatively stable country
Neutral
Stability is a necessary condition when investing in real estate because it fosters a thriving market environment. It is an information you need as a foreigner buying a property in Guatemala.
In recent times, Guatemala has achieved a certain level of stability. The last Fragile State Index reported for this country is 77.5, which is a decent score.
Guatemala has been able to maintain relatively stable economic growth and has made significant progress in reducing poverty and inequality, which has helped to promote social stability. Additionally, the country has implemented a strong security strategy that has helped to reduce crime and violence, creating a more secure environment for its citizens.
Now, let's examine additional data to determine if it's the right time to invest in property in this country.
Guatemala is poised for strong growth
Positive
It's better to check the country's economic viability before deciding on a property purchase.
In line with IMF predictions, Guatemala will, in 2023, grow by 3.4%, which indicates the country is heaidng in the right direction. For 2024, the experts say 3.5%.
Besides that, the economy will keep growing since Guatemala's economy is expected to increase by 16% during the next 5 years, resulting in an average GDP growth rate of 3.2%.
The expected sustainable growth rate in Guatemala is a positive indicator for potential real estate investors, as it suggests the country's economy is growing steadily and is likely to remain strong. This means that real estate investments in Guatemala are likely to be stable and have potential for long-term appreciation.
Nonetheless, GDP growth is not the only metric to look at.
Guatemala's population is growing and getting richer
Positive
When you're in the market for real estate, it's important to give due consideration to population growth and GDP per capita because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Guatemala, the average GDP per capita has changed by 8.2% over the last 5 years. It's a solid number. Furthermore, the Guatemalan population is growing (+10% in 5 years).
This means that, if you purchase a cozy cottage in Antigua and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, there might be an increase in rental demand in Guatemalan cities like Guatemala City, Antigua, or Quetzaltenango in 2024.
Rental yields are really attractive in Guatemala
Positive
If you're wondering about the financial gains of a property investment, consider the expected rental yields.
Rental yield is the indicator of the rental income potential of a property, showing how much you can earn compared to the property's worth.
According to Numbeo, rental properties in Guatemala offer gross rental yields ranging from 5.7% and 8.4%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Guatemala.
Yields like these are rare to come by.
Everything you need to know is included in our Guatemala Property Pack
In Guatemala, anticipate strong inflation
Positive
In two words, inflation is when values inflate.
It's when your favorite plate of pepián costs 30 Guatemalan quetzals instead of 25 Guatemalan quetzals a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, potentially leading to capital appreciation.
- Inflation can result in higher rental rates, increasing the property's cash flow.
- Inflation decreases the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, helping preserve the investment's value.
- Diversifying into real estate provides stability during periods of inflation.
As projected by the IMF, over the next 5 years, Guatemala will have an inflation rate of 21.8%, which gives us an average yearly increase of 4.4%.
This data is telling us that Guatemala is anticipated to encounter inflation, making it a potentially opportune time to buy property. If the property's value increases over time, you can sell it at a higher price and make a profit.
Is it a good time to buy real estate in Guatemala then?
Now it's time to draw our conclusions.
2024 presents a compelling opportunity for property investment in Guatemala, driven by a combination of favorable signals that indicate a promising investment climate. The country's poised growth prospects make it an attractive choice for investors seeking potential returns. Guatemala's commitment to economic development and its expanding population contribute to a buoyant property market that holds the potential for both capital appreciation and rental income.
The growing and gradually wealthier population in Guatemala enhances the appeal of property investment. Increasing personal incomes can stimulate demand for housing and real estate, potentially leading to a surge in property values. As the population's economic circumstances improve, the property market becomes more dynamic and rewarding for investors.
Rental yields, which are notably attractive in Guatemala, provide a strong incentive for property investors. The combination of a growing economy, urbanization, and tourism potential can drive rental demand, ensuring steady income streams and enhancing the overall profitability of real estate investments.
Anticipated strong inflation might be a concern in some contexts, but in Guatemala's case, it can potentially work in favor of property investors. Inflation can drive up property values, benefiting those who own real estate as an inflation hedge. This potential dynamic, alongside other favorable and neutral signals, positions 2024 as an opportune time for entering the Guatemalan property market.
Moreover, Guatemala's current relatively stable status further contributes to the positive investment environment. The country's political and economic stability creates a foundation for long-term property investments, offering investors the confidence to explore the market and its potential benefits.
In conclusion, the combination of strong growth prospects, a growing and wealthier population, attractive rental yields, expected inflation, and a stable environment collectively makes 2024 a promising year to consider property investment in Guatemala.
We wish this article has been of help!. If you need to know more, you can check our our pack of documents related to the real estate market in Guatemala.
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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
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