Real estate is a hot topic right now, not for the good reasons though. Foreclosures, record low home prices and record loss for mortgage banks are in the news almost every day. Especially United States seems to be affected by the real estate meltdown. Other major markets are feeling the downturn as well due to losses suffered worldwide by major banks.
How about Aruba? Did the real estate troubles have any negative impact on Aruba’s real estate? The short answer is no. Aruba’s real estate market is in the midst of a boom. Especially when judging by the multimillion dollar investments in reconstruction of hotels, construction of new shopping malls and the rise of condominium projects as of late.
The majority of residential mortgages in Aruba are given out in the form of annuity, which has the characteristics of a fixed interest rate (interest rate is somewhere between 9-12%), high interest payment at first and high repayment later. Another point to mention is that the interest is 100% income tax deductible for residents.
People who are qualified to obtain a mortgage prefer to do so instead of renting, as rent has the tendency to be higher than a mortgage payment for a similar house.
Several commercial projects are currently under development. The construction projects of Palm Beach Plaza, Paseo Herencia, South Beach Plaza etcetera are focused on the retail, food & beverage and leisure sectors. Despite the fact that these projects are close to one another, square footage rent prices isn’t likely to come down on the short term as there is a lot of demand for an A1 location at Palm Beach.
This new development at Palm Beach, have some people fearing for the further demise of the downtown area where historically most stores are located. I tend to disagree with that stance as the tendencies show that many stores are opening a branch at Palm Beach. Furthermore companies don’t want to abandon the down town area completely due to the very lucrative cruise ships which arrive down town.
Some sort abandonment of the downtown area started way before any shopping area opened elsewhere. The biggest problem with shopping in town is parking. Customers where complaining about this and due to a lack of action by officials, businesses saw themselves forced to leave town or at least opening a branch elsewhere.
Aruba Beach Real Estate
How about the beach real estate? Beach front properties have always been scarce, therefore costly. The purchase of beach front properties or at least beach proximity properties is surging. Especially properties in the district of Noord are in demand, thus more expensive.
The newest trend in beach front real estate is the development of condominium projects, predominantly in the vicinity of beaches. The beach which is receiving a true metamorphosis in regards to the developments in real estate is Eagle Beach, on Aruba’s west coast. Properties start in the prices range of US$ 200,000.
The best deals however are found in an approximate radius of 5 miles from the beaches. One can purchase a 3 bedroom, 2 bath property from only US$ 100,000. By the way if you are seeking a large property, the prices in the highest category surpass the million dollar mark easily.
As foreigners are allowed to own real estate – and property taxes are very low in comparison to countries North America and Western Europe – there are many real estate bargains are out there. With the dollar – euro exchange at 1.55 currently, purchasing a property for Europeans is an even bigger bargain. The same US$ 100,000 property mentioned above will cost just over EUR 63,000 or just over GBP 49,000. You need some eyes and ears on the ground to be on the lookout on those bargains for you. Contact a local Realtor for more information or keep reading arubabeaches.net.