Transcript Document

Chapter 2: In This Chapter
• Development trends
• Legal systems
• Economic trends
• Commercial trends
• Interconnected
economies
• Residential trends
• Government policies
• What you need to
know
• Environmental issues
• Network building
Page 22
Development Trends
•
•
•
•
•
•
Page 22
Attention on energy use and production
Large exports of natural resources
Trade agreements
Remittances
FDI
Emphasis on sustainability
Other Development Trends
•
•
•
•
Coming of age
Baby Boomer retirements
Land banking
Information technology
Page 23-24
Economic Trends
• Opportunity and competition from global
marketplace
• Commodities-based economies
• Service and hospitality
• Potential challenges
Page 25-30
Major Commodity Exports
Argentina
Brazil
Chile
Colombia
Costa Rica
Mexico
Panama
Paraguay
Peru
Uruguay
Venezuela
Page 27
Soybeans and derivatives, corn, wheat, beef,
crude oil, petroleum products
Natural gas, crude oil, petroleum products,
iron ore, coffee
Copper, fish, fruit, wood
Crude oil, petroleum products, coffee, iron
and steel
Fruit (bananas), coffee
Crude oil, petroleum products, iron and
steel, silver, fruit
Fish, fruit (bananas), live animals, meat,
coffee
Soybeans, cereals, meat
Copper, gold, zinc, crude oil, petroleum
products
Meat, leather, dairy, cereals
Crude oil, petroleum products, iron and
steel, aluminum
Interconnected Economies
• Interregional trade agreements
– CARICOM, NAFTA, MERCOSUR
• Intraregional trade agreements
– Between organizations and countries
• Chile-EU
– Between two countries
• USA-Israel
Page 31-33
Government Policies
• Tremendous strides in political and
economic freedoms, including property
rights
• Challenges continue
– Income inequality
– Funding of social programs as populations age
• Building codes
• New construction
Page 33-36
Dollarization and Monetary Policy
• Dollarization occurs due to currency instability
and hyperinflation
– By choice
– By circumstance
• Currency volatility affects real estate market
• During counseling session, discuss with buyer:
– Currency of transaction
– Importance of transferring and converting funds
– Risk of losing property if funds unavailable
Page 36-37
The Americas Currencies
Argentina
Argentine peso
ARS
$
Brazil
Canada
Chile
Colombia
Costa Rica
Dominican Republic
Brazilian real
Canadian dollar
Chilean peso
Colombian peso
Costa Rican colón
Dominican peso
BRL
CAD
CLP
COP
CRC
DOP
R$
$ or C$
$
$
₡
RD$
Mexico
Panama
Paraguay
Mexican peso
USA dollar
Paraguayan guaraní
MXN
USD
PYG
$ or Mex$
$
Gs
Peru
Peruvian nuevo sol
PEN
S/.
USA
Uruguay
Venezuela
USA dollar
Uruguayan peso
Venezuelan bolívar
fuerte
USD
UYU
VEF
$
$
Bs
Page 38
Environmental Issues
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•
•
•
•
Pressure on ecosystems from population growth
Clearing of ecosystems for agriculture
Deforestation
Runoff from deforestation and agriculture
Pollution resulting from urbanization and
industrialization
• Threats to coral reefs, marine life, and coastal lands from
development
• Overfishing
Page 38-39
Curitiba, Brazil
• Green city
– Recycling program
– Public
transportation
– Green space
Page 39
Source: Wikipedia
Legal Systems
• Common law
– USA and Canada, generally
• Civil law
– Latin America and Caribbean, generally
• Notarios
Page 40-42
Law and Real Estate Issues
• Evictions
• Property rights and land use regulations
• Information about title, liens
– Work with competent, local attorney
– International title insurance
• Comparables, other market data
• Mortgage terms and buyer’s age
• Formal legal codes but cumbersome transactions
Page 42-43
Ease of Doing Business Rankings
Pg
45
Registering
Property
Getting
Credit
Protecting
Investors
Enforcing Contracts
4
8
37
Dealing with
Construction
Permits
25
29
32
12
35
51
4
30
61
5
5
5
8
58
152
Chile
Mexico
Peru
Panama
49
51
56
77
67
37
117
68
42
99
28
65
71
61
15
30
41
41
20
109
69
81
114
119
Dominican
Republic
86
92
112
71
57
86
Uruguay
114
140
165
43
93
96
Argentina
118
168
115
61
109
46
Costa Rica
121
128
49
61
165
132
Paraguay
124
106
79
71
57
104
Brazil
Venezuela
129
177
113
94
120
97
87
177
73
178
100
74
Country
Overall
USA
Canada
Colombia
Source: Doing Business 2013, The World Bank Group
Commercial Real Estate Trends
• USA and Canada
– Downward trends but overall stability
– Supply high in USA and Canada
• Latin America and Caribbean
– Supply of Class A space low so demand is high,
stimulating development
– Development often financed through equity rather
than credit
– Brazil, Colombia, Chile, Peru, and Panama particularly
active
Page 46-48
Market Drivers
• Land banking
• Global corporate
expansion
• Resorts and hotels
• Medical facilities
Sources: Wikipedia, Authority of Tourism Panama, Consejo
de Promoción Turística de México, Hospital Punta Pacifica
Page 49
Residential Real Estate Trends
• Home prices generally
on upward trends
• Second-home market
Transaction Costs
Source: Global Property Guide
Page 52-54
What You Need to Know
• “Coming of age”
• Diverse, emerging economies
– Good for real estate markets
• Competition and opportunity in global economy
• Environmental issues
• Role of government in sustaining growth
• Regulatory policies impact transactions
• Common law and civil law impact transactions
differently
• Real estate drivers
Page 55
Network Building
• Make contacts and nurture
relationships to:
Pg
58
– Gain access to targeted
markets
– Maintain current market
awareness
– Reach prospective clients
and referral partners
– Inform others about local
investment opportunities
– Publicize services and
capabilities
Who You Need to Meet
•
•
•
•
Page 58
Potential clients
Colleagues
Owners and sellers
Representatives of any
of the above
Making Contacts
• Bilateral partners
• NAR Global on Facebook
• CIPS on Facebook
– For CIPS Designees
• Market-to-Market Program
• Sister Cities International
• Global real estate expos and events
Page 60-62