New Nicaraguan coastal law: A crossroads for the housing market

New coastal laws currently under discussion in Nicaragua could spell disaster for some investors and have a massive negative effect on the country’s housing market.

Nicaragua currently has some outdated property laws which need reforming as they are over-complicated and contradictory. However some investors are concerned over a proposed new bill.

President Daniel Ortega has said he wants to preserve public access to beaches and also help to protect marine wildlife whilst also being sympathetic to property rights and foreign investment and some are concerned over some of the rumours that are emerging over the property bill. One such rumour is that exclusive rights to beaches may be offered to paying customers with rights extending to up to 50 years at a time.

At the moment, there is little indication over how coastline property developments will be affected. Currently, building is restricted to within 30 metres of the shoreline, but the bill is expected to extend this restricted zone. As a temporary measure until the new laws come in, property titles within 805 metres of the water have been suspended.

Around 95 percent of coastal properties along the coastline belong to overseas investors and many properties have yet to be fully constructed. Many investors fear that the new law will prevent them from building on land that they have already purchased, thus seeing them lose significant amounts of money on their newly purchased real estate.

So, the new laws could be critical to the housing market in Nicaragua – if the new laws do see investors ending up with a lot of useless real estate, it is believed that many of these people will simply pack up their bags and return home and not invest any money into the Nicaraguan property market. However if the legislation does allow them to build on their land, many will be looking to expand their portfolio and therefore bolster the local housing economy.

As it stands, the legislation is a crossroads that will either propel Nicaragua forward as one of Latin America’s foremost property investment hotspots, or have negative repercussions on the real estate market for many years to come.

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