Remaining one of the best "sure thing" investment options in Latin America, luxury real estate in Antigua, Guatemala is short on bargains but has a strong history of good rental returns and appreciation.
Pick up any magazine or newsletter about living abroad and you'll find plenty of articles and advertisements about buying a home in Mexico or Central America. There is seldom any mention of the closest Central American country to the U.S. or Canada: Guatemala.
That doesn't mean you'll find fire sale prices though in Guatemala's most attractive city: Antigua. The city is small and the compact historic district has a limited amount of inventory at any time. It is a UNESCO World Heritage site with easy airport access about an hour away. The climate is warm and sunny but not too hot, so it's a desirable place for both tourists and retirees. In addition, foreigners are competing with wealthy local investors from Guatemala City.
I spoke with Glenn Wilson, owner of the Century 21 Antigua Fine Homes to talk about the local market and sample prices.
We spoke with Marlon Catalan from your brokerage back in 2015 about high-end real estate in Antigua. Where is the market now in 2020?
Up until the corona virus hit our market was pretty brisk. Some of our sales have hit a pause obviously because of travel restrictions, but we have seen a trend in the last year or so of Guatemalans who were living abroad coming home to retire. This translates into around 60% local buyers and 40% non-local buyers (returning nationals or foreigners) in the market. Most people are buying a retirement home, or a second home for vacation or special events, or as an investment. Antigua, the city, is a bit of a supply and demand market because of building restrictions and because expansion is not something they are encouraging here.
How has this affected prices and what should potential vacation or retirement buyers know?
Prices have seen a slight increase since the last time we talked, with most luxury properties in the historic center priced at $750K and up. You can still find a luxury home in the surrounding area—meaning about 5 minutes by car, 25 minutes walking—for much cheaper, a 2,500 square foot home for example for around $250-300,000 in a gated community. Home appreciation has gone up 7% in the city center over the past few years and about 4% in the surrounding area.
One thing to know is that the time properties stay on the market here might be considered bizarre in the States, it usually takes about 6 months to move homes for sale. A major factor is the strong culture of negotiation in business here. Sellers (both nationals and non-nationals) tend to list their houses higher than they should, with the expectation that they will have to negotiate with potential buyers. These high prices can be a deterrent for someone looking unless they know that they can make a lower offer without potentially insulting sellers. This means that some properties get bypassed and stay on the market for a while before someone bites or sellers drop their list price. Because of this it's important to work with someone that knows that market well and can give you a heads up when there is wiggle room in the price. Here it's not unusual for a $1.2 million property to sell for $1 million and that's a pretty big difference.
There are exceptions of course, of sellers that will price their properties appropriately and those homes sell faster.
What should buyers used to luxury homes expect to pay for something impressive in this city?
About 10% of our entire inventory right now is luxury properties both in the historic downtown and in the surrounding area and gated communities. In town most luxury properties are between $700K and $1.5 million. Many of the large family homes in the higher range that are owned by Guatemalans are sold privately by word of mouth. You get a lot more for your money if you don't mind being a bit further out and there are some nice gated community developments. This is better for retirees or permanent residents though as the rental potential is not as great.
What are some guidelines to keep in mind to make sure the investment is a good one in terms of resale value and rental return?
Design is extremely important. You have to remember what people expect when they move here—colonial Mexican design with Spanish influence. That's not to say you can't have a house that's modern, the best architects are able to combine both, but you have to keep in mind what will be attractive to future buyers. Location is another important factor. Proximity to downtown will make a home more attractive for rent or resale to a certain audience, and homes in gated communities to another. Security is always a big factor for buyers here, and sometimes that's just a question of a few blocks east or west. Something that looks like a great deal might not be a great location for resale or rental.
Amenities count. Green space, a swimming pool, maid's quarters, parking—all these factor into people's decision to buy. Sometimes potential buyers don't consider parking, but because of building restrictions in the historic center, if a home doesn't have a garage it never will. Prices aren't outrageous but you might not want the extra cost of monthly parking or the inconvenience of having to walk a few blocks to your house every day—especially in the rain.
What are some of the unique challenges of investing in Antigua? What should potential buyers be aware of?
Investors looking to build residential or commercial properties should be aware of numerous restrictions in the Antigua area. There are strict guidelines that need to be followed to ensure that anything being built adheres to architectural standards imposed by Antigua's cultural preservation laws.
There is no licensing for real estate agents here so buyers and sellers should just be sure they trust who they are working with, that they have decent inventory, and that they have a track record of selling property. Buyers also need to work with a lawyer specializing in property law that can be arranged through your real estate agent.
Let's say I'm an investor with a large budget and I'm intending to use the property as my own home. What could you show me right now?
We have some incredible properties in the high-end market. This 4-bedroom, 5-bath colonial mansion is selling for $2.9 million. It sits on a corner lot and has incredible views of the city along with interior and exterior courtyards, a fireplace, a swimming pool and sauna and an exquisite master bedroom with vaulted ceilings. We also have a luxury 4 bedroom, 4.5-bath residence outside of town about 10 minutes with a swimming pool, backyard, double high ceilings, fireplaces and views of the nearby volcanoes. That property is listed for $890,000.
To see a variety of homes for sale in the area, go to the Antigua Fine Homes Century 21 website.
Update 2020 by associate editor Lydia Carey, photos courtesy of Antigua Fine Homes Century 21.