Sunny weather and azure coasts are well-represented in this list of the top 10 locations worldwide to buy a retirement home. The list includes tropical locations like Brazil, Belize, Costa Rica and St. Lucia, along with the home for the 2010 Winter Olympics, Vancover, Canada. See the following article from International Property Journal for more on this.
To even casual buyers, a second home represents both a major investment and a fantasy, an escape with the promise of riches and adventure.
Evaluating a market based purely on rental yield algorithms misses the swirl of emotions felt by the typical buyer, from retirees to jet-setting luxury home collectors. Yet sentiment can’t blind the financial reality of a hard asset worth at least hundreds of thousands of dollars, a big chunk of any portfolio.
Relevant factors in our assessment included uniqueness, affordability and the opportunity for capital appreciation. Security was also a big issue—both physically and financially. Locations with unproven demand were quickly eliminated, as were isolated locales catering to survivalists. The goal was to spotlight markets that combine a variety of factors, not serve niches like the best jungle locale or the best golf course market.
The list, undoubtedly, tends to be U.S. centric, a nod to our home base. Destinations like Cape Verde and Seychelles, for example, may be wonderful spots to buy a vacation home, but they are drawing few U.S. second home buyers. We also defined “second homes” strictly as vacation properties, getaway spots, which meant we left off Paris, Barcelona and other urban centers, where many people own second homes, but may not use them strictly as vacation getaway properties.
Preference was generally given to destinations off the theme park routes and away from the strips of hotel towers, tempered by recognition that it never hurts to have a Four Seasons nearby, in case of emergency. It’s the mixture of isolation and resources that make an ideal second home market, the ability to generate rental income and snorkel in warm waters without fear of getting run over by a cruise ship.
To calm the quibbling and sniping, the list is presented in no particular order, reflecting our inherent cowardice:
Riviera Nayarit, Mexico
Sure, Mexico is experiencing waves of violence and upheaval. “That’s the way it always is in Mexico,” shrugs a friend, who writes travel books on Mexico.
Often overlooked amid Mexico’s array of pre-fabricated Fonatur-designed tourism Meccas, the area north of Puerto Vallarta has experienced a mini-explosion of luxury home development in recent years. The master-planned area on Punta Mita, anchored by a Four Seasons and a St. Regis, offers the A-list, gated community lifestyle. Further up the coast a variety of projects are going up along a route of white-sand beaches, surfer spots and small fishing towns. Best of all, the starting point is Puerto Vallarta, one of Mexico’s classic, romantic old cities.
You just can’t leave Brazil off these lists. The economy is booming, part of the BRIC resurgence changing the world. There are large swatches of barely developed, beautiful land. And now Brazil is set to host both the World Cup and the Olympics in the next six years, which should prove another jolt of adrenalin to carnaval. Putting Brazil on any list of hot investor spots falls into the “well, duh” school of analysis.
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Of Brazil’s many hot spots, Natal stands out as the gateway to the northeast, Brazil’s top domestic tourist destination. While hardly a new market–the northeast coast attracts more than 7 million visitors a year—the stretch of coastline north of Natal “represents the best potential returns for private investors” in Brazil, Kapital Assets c.e.o. Keith Punler recently told a reporter. A new airport should also change the complexion of the area, offering more direct flights from Europe. As more infrastructure goes in, the spectacular coastline’s popularity as a second home destination should only increase.
Hermosa, Costa Rica
Never has an airport changed a location as dramatically as the Daniel Oduber Quiros International Airport in Liberia transformed Guanacaste, the stretch of rugged coastline on the northwest coast of Costa Rica. No more treks through San Jose and puddle jumpers over the mountains to get to the coast. Instead it’s an easy flight into Liberia and a pleasant 20-minute drive over a nicely-paved highway to the Guanacaste coast, which was in the midst of a spurt of luxury development before the slowdown.
Hermosa is a barely existent small town with few paved roads, a handful of open air restaurants and sporadic electric and water service on its own little cove, across Papagayo Bay from the Four Seasons Papagayo. With a small cluster of condos and luxury homes covering the hillside, Hermosa and neighboring Coco consistently rank as one of the most expensive places in Central America to buy an ocean view condo, according to Reveal Real Estate. Several large-scale luxury projects have been delayed in the area, including AOL founder Steve Case’s Cacique, a few miles south of Hermosa. When activity picks up, Guanacaste is set to develop as the Costa Rica Riviera.
Someday—maybe a long time from now, but some day—Belize will develop as a spectacular second home market. The trick will be to preserve the spectacular natural wonders and isolation of the country, while providing more of the necessary amenities and creature comforts required by many North Americans.
Placencia, one of the few spots on the mainland coast with white sandy beaches, is something of a test case. Several mid-size developments are going up along the coast. The only road on the peninsula is finally getting paved. And Francis Ford Coppola’s Turtle Inn provides a level of upscale trendiness.
Yet Placencia remain remote, isolated, a quick hop away from the jungle or the underwater splendors of the world’s second largest barrier reef. Development continues to inch forward, with few signs of life from Ara Macao, the big project planned for the north end of the peninsula. While investment money and direct flights continue to flow, it will be years, probably decades, before Placencia gets that overwhelmed, too-crowded feel creeping into Ambergris Caye, Belize’s primary destination.
Spain may be struggling, but Mallorca still holds a special allure. The island provides a compact mixture of the Mediterranean yacht scene, old world expats and picturesque Spanish countryside, with only a dash of the throbbing disco scene found on other islands.
Sales on Mallorca are down by more than 60 percent from 2007 levels, but demand remains high for top-level property, according to recent reports. But valuations have fallen far less than other areas; even in tough times Mallorca holds its own. Offering both seaside retreats and quaint hillside villages, it is still seen as the perfect Mediterranean escape, an old school destination attracting a new generation of buyers.
Jolly Harbour, Antigua
In the array of Caribbean islands, Antigua stands out as a throw-back to old England. Richard Burton owned a house here and Eric Clapton built his high-end rehab clinic on the island (although he’s reportedly selling his estate). Antigua has a firmly entrenched status as a hideout for celebrity royalty, which rivals its reputation as a home for shady banking operations (Google: “Sanford Ponzi Scheme”.)
Antigua is high-end, yacht-friendly Caribbean, without the millionaire tourist clubs of St. Barts or the Cayman Islands. There is still relatively little development, which is mostly clustered around Jolly Harbour on the west coast. In 2007, even as other markets began to falter, Antigua prices zoomed 40 percent, one of the largest jumps in the world according to Knight Frank research. Nobody expects those types of leaps in the future, but it’s fair to say Antigua will remain beloved by the yacht and cricket set.
Geography has blessed Vancouver. It sits amidst a spectacular landscape of islands and mountains, a land where you can whale watch in the morning and ski in the afternoon. Situated a stone’s throw from the U.S. border, it is also the first stop and destination of choice for many Asian investors, assuring it will be one of the first to benefit from the growing number of Chinese and Korean buyers.
Home base of the upcoming Winter Olympics, Vancouver itself offers an array of towers and trendy apartment units, one of the best urban centers in North America. But move beyond the city and there is a wide array of markets, from the ski resort of Whistler, to the fishing rivers of Squamish, to the isolation of the gulf islands.
OK, it’s a wild card. The splintered countries of post-war Yugoslavia still have unresolved issues. But the Adriatic Coastline is spectacular and remarkably free of the clutter of most European coastlines. Most of amenities are still dreary throwbacks to the Tito regime.
But there is also an entrenched market in Croatia, long a favorite of German and Italian tourists. (German is the most common second language.) As it further integrates into the EU, property rules will align with the rest of Europe and traffic from the second home-mad U.K. will undoubtedly increase. There will be more cheap flights, more development and more access to property.
Hvar is a spectacular island off the Dalmation Coast, an easy ferry ride from Split. Steeped in the turbulent history of the Adriatic, Hvar is a rapidly growing tourist destination, with spectacular coves and secluded beaches. While hardly undiscovered, it is still new ground for the international industry, and its never-ending search for new islands.
San Diego, United States
The numbers don’t lie. Always one of California priciest markets, prices plummeted 25 to 35 percent in many neighborhoods. And those neighborhoods are spectacular, perched on a sun-splashed stretch of coastline with the best weather in the United States (marred only occasionally by brush fires of Biblical proportions.)
San Diego doesn’t have the vast over-supply of units found in, say, Florida, which means it will likely stabilize and bounce back quicker. Nevertheless, more than 7,600 condos units went up from 2001 to 2007 in San Diego’s downtown, which sits on the pristine bay. Many of those units are for sale, with prices that would have seemed ridiculous two years ago.
Rodney Bay, St. Lucia
Of the emerging islands in the Caribbean, St. Lucia has all the elements in place for steady growth. Its array of spectacular coves and beaches is augmented by its unique Creole culture, pristine twin Piton peaks and swatches of rainforest, a rarity in the Caribbean.
More importantly, investment money is flowing to the island, which is still in a relatively early development stage. Many of the second home projects are clustered on the north end of the island around Rodney Bay, where there are clusters of luxury homes. A fairly easy drive from the international airport as Castries, the area offers classic Caribbean style at prices below the sky-high offerings in Barbados.
Honorable mention: Inland Panama; Provence, France; Punta Cana, Dominican Republic; Riviera Maya, Mexico; Umbria, Italy.
This article has been republished from International Property Journal. You can also view this article at International Property Journal, an international property news and information site.