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1st August 2007

It's Va Va Voom in Venezuela

This exotic outpost has all the benefits and few of the pitfalls of some overseas favourites closer to home - and a property sector that's revving up…

Even for seasoned overseas property buyers, South America may seem like a continent too far – and Venezuela an outrageously exotic option for an investment or holiday home. But look closely at a map of the region and suddenly the attractions of this classy corner of the Caribbean become obvious.

The country, which covers much of the northern coast of South America, has 2,800 kilometers of coastline washed by the same tropical seas as nearly by Barbados and Trinidad. It has all the advantages of the Caribbean islands, yet without the hurricanes. Furthermore, it’s a country that has long been a stable, prosperous part of an often troubled continent, and while other international property markets are faltering as they reach the far extremes of affordability, Venezuela has plenty of room for Capital growth. Venezuela has plenty of room for capital growth.

Venezuela was named “Little Venice” by Columbus as the native houses, built on stilts above the water, reminded him of his Italian hometown. The far north-east of the country is also the northern extreme of the Andes, with a high point of nearly 6,000 metres at Pico Bolivar. To the South is the Amazon Basin bordering Brazil, where you can find Angel Falls, the world’s highest waterfall. In the middle are the plains of Los Llanos. Most of the 26 million, Spanish, Italian and Amerindian descended population live along the northern coast, including Caracas, the endearingly chaotic capital city.

However, most British property buyers will be looking at Venezuela’s holiday island, Isla Margarita. It’s the largest and most developed of the country’s 72 Islands, and has been described as being like the Dominican Republic – only smarter. It boasts daytime temperatures that vary during the year from 24C to 38C (75F to 100F), yet there is no rainy season. Crucially, it’s outside the hurricane belt that causes so many problems for homeowners elsewhere in the Caribbean. Oddly, Isla Margarita is also one of the largest importers of Scotch whiskey in the world!

Venezuela has been a beacon to the rest of South America for many years. While its neighbours suffered coups and dodgy dictators for decades, Venezuela was a democracy. While those same neighbours suffered poverty and low living standards, in Venezuela, they discovered oil – lots of it. Now they can afford to invest in their infrastructure, hospitals, schools and social programmes – and the Head of State (and one of the world last remaining socialist leaders), Hugo Chavez, can afford to openly criticise George W Bush. Luxury indeed!

It may be critical of the Western governments, but Venezuela is now enjoying a distinctly capitalist-style economic boom – and Margarita is where a lot of that wealth gets spent. Entry levels prices are under £50,000, sound investment villas can be had for just over 100,000, and you can live in the lap of luxury in a top-spec mansion for under £200,000.

The island is 67 kilometres long and 32 kilometres across at it’s widest point. There were a grand total of 1.5 million visitors in 2005 and it is the number one holiday destination for Venezuelans. The city of Porlamar has the usual collection of shopping malls, hotels, restaurants and nightlife, as well as an international airport. The islands capital, Las Asuncion, is set on a hill overlooking its eastern tip. Perhaps the most beautiful town is colonial-style Pampatar, with its pretty harbour. Here you can sit and watch the fishermen haul in their catch before dining on fresh fish in the waterside restaurants. Another fishing village along the coast is west-facing Juangriego, renowned as a place to watch the sunsets over the tropical seas. The crystal waters offer excellent sailing and scuba diving.

For Kevin Parson, of Parson International, it is the hurricane-free tropical seas that constitute the areas particular appeal: “You have extremely low entry-level prices at just £50,000, yet a great climate all year. You can sit there, watching the sunset over a tropical beach, knowingly that your property is increasing in value – even while the living costs are amazingly low. You can buy a beer for 16p – or splash out on a meal for two for £6!”

Venezuela is coming late to the property party, with capital growth of around ten per cent in 2004-05 doubling to 20 per cent in 2006, at the same time as other Caribbean prices rises were slowing down. More northerly Caribbean destinations seem to have priced themselves out of the market. And while Florida’s property boom has hit the buffers, investors have been looking elsewhere for capital growth and seen this equally beautiful – but in many ways safer – place to put their money on the other side of the Caribbean.

Andy Davies of Your Place Abroad points to the simple buying process, based on Spanish Law, the low property-buying taxes (under £200) and the rental guarantees that companies like this offer. “The local hotels are not very high quality, yet still achieve 70 per cent occupation levels. Our apart-hotel properties can better that because they are built to a higher specification.” While Spanish is the default language here, many people understand English, which is another advantage.

It isn’t just Isla Margarita that looks good for continued growth. According to The Economist: “Emerging-market indicators show that Venezuela is the fastest- growing country in the world. GDP growth is up 11.2 per cent year on year (2005 figures), and it is the only country in the world that registered a double-digit growth rate.”