From the publication of “Freakonomics” (Levitt&Dubner, 2005) the strangest indicators can explain us the most significant dates.
For example, in Asunción in the last two years it was feared that there were too many corporate offices. In a short time enterprises and companies had at their disposal 100 000 m² and that was easy to say but it needed time to be implemented.
In the face of the majority of pessimist predictions, the occupation of these offices has far outstripped every expectation, even the most optimistic. Unlike some other countries, (for example Italy or Spain), which are already saturated with buildings, Paraguay continues to be a safe bet, because this country has still a long way to go.
It is easily understandable the relationship between the GDP (Gross Domestic Product) of a particular country and the security of ROI (Return On Investment). The more stable a country is, the greater its derived synergies are: related businesses, suppliers and consumers will increase, legal and social context will remain stable and so on….
At the end of a day an investor considers more important not so much the starting point in absolute terms, but the real return of an investment.
With a considerable economic growth, above 4% and a controlled inflation, office rental and trade continue to be a very good business both for owners and for companies, which occupy those spaces.
The price per square metre can be higher than the price you made by family building construction, because for private individuals it is a matter of buying a staple product as an accomodation, but for private companies it is a matter of an investment, which makes an income the moment they occupy that space, in order to generate more economic benefits by their activity.
For example, we are talking about an annual income of 7% per square metre, if you buy a whole floor in an advanced state of completion (price goes down if you buy “on paper”) and it can also reach 9%.
Suppose we buy Facebook common stocks at the price of 188 USD each and they give us an increase of 0,5%. And, at the same time there are other stocks, which are worth 5 USD each, but give us an increase of 4%. So, you will have more income right where and when you are not looking and where increase has been greater. The same is true, if it is a matter of investing in properties, of starting business activities and so on….
If cost is less and income is greater, things could get really more interesting than the usual old patterns.
For instance, let’s consider capital costs:
Asunción is the second city of South America as regards the lower cost per square metre and it is only preceded by Santa Cruz (Bolivia). In Asunción the average cost is about 1300 USD and that price is abundantly doubled by Santiago del Chile, the most loved city of the area, where the cost per square metre is 3000 USD.
Of course prices vary depending on the neighbourhood: from Manora’s 1700 USD to Jara’s 1000 USD. An hour away from the capital, in Central Department, costs fall below 900 USD. And all this without going into considerations of agricultural lands, which also offer other kinds of benefits and opportunities. In Paraguay, the rental and trade business of properties increases every year. This is exactly why Paraguay understood that mediators and real estate agents needed more training. And it is up to this point that real estate professionals’ experience gains value: of course we are speaking of real estate professionals from all sectors and coming from others countries. We are also speaking of their desire to be employed in Paraguay or to do business by themselves.
We of Living in Paraguay can advise you about your investments both as regards legal sector and thanks to our multi-annual business experience. If you invest with us, you will have only a regret: not having done it before!
In Paraguay the growth of real estate market is very high: we can really compare it to a baby who starts walking and has the whole future in front of him/her!
