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Latin America Investment News on Viva Tropical

Property Prices Dropping in Costa Rica? Banks Overrun by Foreclosed Properities

Article Summary:

Publicly owned Costa Rican banks are loaded down with foreclosed real estate property, at the end of last year inventory included luxury apartments, residential homes, shopping centers, factories, farms, commercial lots and tourism projects located in the north Pacific coast north of the country. It might just become a buyers market as banks contemplate strategies to sell off this inventory in the next two years.

Photo Credit: Nacion

Original Article Text From Nacion via Google Translate :

Public Banks are Loaded with Properties For Sale

The National Bank, Banco de Costa Rica (BCR), Bancrédito and Banco Popular have in their portfolio properties for sale ¢ 81.102 million (almost double the cost of the National Stadium).

“Goods purchased” as they are registered with the Superintendent of Financial Institutions (Sugef) are assets that passed through an auction process, or that were given in lieu (debt compensation) in return for the obligations undertaken debtors did not pay.

The entity that has more assets of this type is the National (¢ 49.315 million), followed by the BCR (¢ 17.115 million), Popular (¢ 11.178 million) and Bancrédito (¢ 3.492 million).

“There are processes in accordance with customers to try not to reach the top, but in some cases this is not possible. Wherever possible, try to make the debtor can retain their property, as the bank’s business is awarded guarantees, “said Arnoldo Trejos Dobles, deputy Bancrédito.

For his part, Diego Chevez, head of the Temporary Property Unit of the National, said the auction is the step before being acquired by banks, not to receive offers in a classroom process.

Explosive growth. The international financial crisis and its effect on the local property sector was the trigger element in the growth of the acquired assets held by public banks.

Although the portfolio since 2008 shows continuing growth in 2009 was a peak was reached when an increase of 122%, precisely during the height of the crisis. Last year, in contrast, growth was 19%.

At Dec. 31, banks have had in their luxury apartments, residential homes, shopping centers, factories, farms, commercial lots and tourism projects.

Of the latter, banks indicated that much is for properties in the Pacific coast north of the country.

Sugef given within two years for banks to sell these properties, the price should be set by experts.

Link to Original Article:

From Nacion

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