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Go Global
Government and Politics – Their Role In International Real Estate
By Patricia Tan
During a recent real estate conference in England, I had the opportunity to meet the Panamanian ambassador to U.K. and to hear him speak on the Panamanian real estate market. The occasion gave me cause to reflect on the role that governments play in their real estate markets, and how their policies and practices can influence the thoughts of international investors.
The downturn in the American real estate market over recent years has given us cause to reflect upon the ways in which government policies can influence a market. From the lack of control in lending practices to promoting tax credits as market stimulants, the U.S. property market and its investors have responded to government initiatives. We are now in an era where U.S.A. real estate is seen as an attractive investment for overseas buyers, and many of the reasons for this are direct results of the actions of our government: Low mortgage rates, relative weakness of the U.S. Dollar on the international currency markets, first time home buyer tax credits to create demand, support for our financial institutions and so on.
International real estate investors around the world pay great attention to the government and political stability of the countries in which they consider investing. We have certainly seen evidence of this in our own local real estate market as well as those of other countries in which we sell properties. Central America and the Caribbean are not necessarily the first areas to spring to mind when investors think about political stability, but consider these two examples – both countries in which we are seeing increased real estate sales activity.
Panama
In June 2009 Ricardo Martinelli, a successful, conservative business man upset Panama’s ruling party to win the presidency. Martinelli is a U.S.-educated free-marketeer, whose business empire includes supermarkets, banks and agricultural firms. He was chairman of the Panama Canal’s board of directors and Minister of Canal Affairs when the country voted to approve a $5.25 billion expansion of the Panama Canal, which has already created 2,000 new jobs and promises to engender many more before the project is finished in 2014. The Canal expansion drew world attention to Panama and fuelled price appreciation in its real estate market. The change in President, and his approach to more open government, has once again drawn world attention to this Central American country and we are seeing renewed interest in real estate in Panama. We are able to offer single family homes, condominiums and raw land investments, including some fractional offerings, and we see interest from Americans, Canadians and Europeans looking for a second home, retirement destination, or investment opportunity.
The Bahamas
Closer to our own shores of Florida is the Bahamas. Often seen as a “safe” place for real estate investment, the Bahamas has a reputation as a stable, developing nation with a government that fiercely protects and develops its tourism and offshore banking based economy. The Bahamas enjoys the third highest per capita income in the Western Hemisphere, and the highest in the Caribbean. This nation has come a long way from its origins as a pirate haven in the 16th and 17th centuries!
The government of The Rt. Hon. Hubert Alexander Ingraham, Prime Minister, was sworn in on May 4th 2007. It has continued to promote a tax friendly environment for individuals, trusts and corporations and to encourage investment in real estate and real estate development. No taxes on capital gains, corporate earnings, personal income, inheritance or dividends. International investment in real estate is encouraged, and foreign persons can enjoy a two year property tax exemption when they acquire land in the Bahamas. Our own international marketing activities have identified a need for quality beachfront properties for Floridians, other North Americans and British buyers looking for relaxed island living in a second home, where they can enjoy fishing, diving and other water sports.
The International Division of Prudential Palms Realty in Sarasota is planning a series of seminars on international real estate in Panama, the Bahamas and other destinations around the world. Call Patricia Tan on 941-504-9232 for more details.
Patricia Tan was born in England, and moved to Sarasota in 1997. Her career afforded her the opportunity to live and work in many countries around the world, including Australia, Hong Kong, Singapore, Malaysia, Indonesia, Germany, France, Belgium, Netherlands and the United Kingdom. She spent five years as a Director of an American real estate franchise in England in 1990s. Patricia has served as Chairperson of Sarasota Association of REALTORS®’ International Council, and serves on Florida Association of REALTORS®’ International Operations Committee. She currently works as International Sales Director for Prudential Palms Realty. Patricia may be reached at 941-487-5107 or patriciatan@prudentialpalmsrealty.com [2].
Copyright © 2010 REAL Magazine
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