The runaway rise in real estate prices in high competition areas in Nicaragua has reached an inevitable plateau. According to Raul Calvet, president of a firm that provides consulting services to tourism and development projects, the local tourism real estate market has suffered a drop in sales of between 60 and 70 percent this year, compared to previous years. This is due to “several factors,” he says, like the image of the country, problems related to property ownership, and concern over mixed messages coming from President Daniel Ortega. But the main reason is that money for investments is more limited than in recent years. The recent increase in the prime lending rate has had a major negative impact on global stock markets.

Over the last few years, owners of residential tourism projects (estimated at close to 125 in the country) were selling up to three or four lots a month, but are now averaging about one sale a month. Another factor is the price asked for the properties. They ran at $17 to $25 a square meter back in 2002 and 2003 and are now in the neighborhood of $200 to $250 in highly-desired coastal areas. On the other hand, there are many relatively inexpensive real estate deals to be made in other parts of the country.