Real Estate - El Salvador

El Salvador

The Real Estate market market in El Salvador is anticipated to achieve a value of US$189.70bn in the year 2024.
Among the various segments, Residential Real Estate holds the dominant position with a projected market volume of US$152.60bn in the same year.
This segment is expected to exhibit a Compound Annual Growth Rate (CAGR) of 2.86% from 2024 to 2029, leading to a market volume of US$218.40bn by 2029.
In terms of global comparison, United States is projected to generate the highest Real Estate market value, amounting to US$132.0tn in 2024.
The real estate market in El Salvador is experiencing a surge in demand for beachfront properties due to the country's beautiful coastlines.

Key regions: United States, China, Japan, Germany, United Kingdom

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Analyst Opinion

The Real Estate market in El Salvador is experiencing significant growth and development.

Customer preferences: Customers in El Salvador are increasingly interested in purchasing real estate properties, both for residential and commercial purposes. The demand for residential properties is driven by factors such as population growth, urbanization, and the desire for homeownership. Additionally, there is a growing interest in commercial real estate, as businesses seek to expand and establish a presence in the country.

Trends in the market: One of the key trends in the real estate market in El Salvador is the construction of new housing developments. These developments offer a range of housing options, from affordable housing for low-income families to luxury properties for high-income individuals. This trend is fueled by the government's efforts to promote affordable housing and the availability of financing options for homebuyers. Another trend in the market is the increasing demand for mixed-use developments. These developments combine residential, commercial, and recreational spaces in a single location, offering convenience and a vibrant community atmosphere. Mixed-use developments are particularly popular in urban areas, where there is a high demand for both housing and commercial spaces.

Local special circumstances: One of the special circumstances in the real estate market in El Salvador is the presence of remittances. Many Salvadorans living abroad send money back to their families in the country, and a significant portion of these remittances is invested in real estate. This inflow of funds contributes to the growth of the real estate market and provides opportunities for both developers and investors. Another special circumstance is the government's focus on infrastructure development. The government has been investing in the improvement of roads, utilities, and other infrastructure, which has a positive impact on the real estate market. Improved infrastructure attracts businesses and residents to certain areas, leading to increased demand for real estate properties in those locations.

Underlying macroeconomic factors: Several macroeconomic factors contribute to the development of the real estate market in El Salvador. The country's stable economic growth and low inflation rate create a favorable environment for investment in real estate. Additionally, low interest rates and the availability of mortgage financing make it easier for individuals to purchase properties. Furthermore, the government's efforts to attract foreign direct investment (FDI) have a positive impact on the real estate market. Foreign investors are attracted to the country's business-friendly policies, stable economy, and strategic location. This influx of FDI contributes to the development of commercial real estate and boosts economic growth. In conclusion, the Real Estate market in El Salvador is experiencing growth and development, driven by customer preferences for residential and commercial properties. The construction of new housing developments and the demand for mixed-use developments are key trends in the market. Special circumstances such as remittances and government infrastructure development also contribute to the market's growth. Underlying macroeconomic factors, including stable economic growth and low interest rates, further support the development of the real estate market in El Salvador.

Methodology

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.