Pedro González has driven his car for four hours from Guatemala to El Salvador. He is 47 years old and has his eyes set on the coastal area of his neighboring country, which has recently re-elected Nayib Bukele as president.
“In Guatemala you hear good things about Bukele and the security that El Salvador now has. I come to see what can be done here for the future,” he says, standing at the entrance to Playa San Diego in La Libertad.
The message of change in public security in El Salvador has crossed borders: the gangs that had been exercising control in the neighborhoods through homicide and extortion for decades were dismantled during the Bukele government. The result: a tourism boom.
“I came because they are going to show me some beach lots. There aren't many anymore. But let's see if they convince us. I want to invest in El Salvador,” González told the Voice of America.
He has a budget of $25,000 with which he seeks to buy a property on any beach in La Libertad, a department that has often been mentioned by the government because a road was recently inaugurated that leads to the circuit of beaches that the government named Surf Cityand also because an amusement park opened in the area.
“El Salvador is beautiful. Not only does it have good roads, it also has a well-developed tourist area. And now with security it is much better,” said González, highlighting how the Salvadoran government managed to lower its homicide rate to 2.4 per 100,000 inhabitants in 2023.
Eight years ago, El Salvador recorded a rate of 103 homicides per 100,000 inhabitants. That was the most violent year in its recent history.
The increase in security that the “war against gangs” has brought – as Bukele advertises his controversial security plan – has increased not only tourism, which increased 36% between 2022 and 2023, but also real estate prices. . Especially in areas where there are foreigners on vacation or looking to do business. But while foreign investors take advantage of the opportunity, prices are out of reach for most Salvadorans.
“I'm having a hard time finding land. I've come several times, and the ones that fit my budget don't convince me. And the ones I do like are worth an arm and a leg,” said González, who works as an agronomist in a fruit exporting company in Guatemala.
From El Salvador there is an important before and after from March 2022, when the Mara Salvatrucha, an organization considered terrorist in El Salvador and whose reach extends to Honduras, Mexico and the United States, carried out its last massacre, in the that 87 Salvadorans were murdered in one weekend.
Bukele, who by then claimed to have control of the territories through his Territorial Control Plan, responded to the homicidal wave by requesting Congress for an exceptional regime with which he hit the gangs until they were dismantled. The Police and the Army entered each Salvadoran neighborhood and captured without legal limits anyone who was suspected of being a gang member or gang member's collaborator. The emergency regime has already been extended 24 times and has been in force for two years.
San Diego Beach was reborn after that measure. Before the emergency regime it was controlled by the dangerous Mara Salvatrucha.
Tourists stopped coming to the beach when they heard rumors of disappearances or, in the least of evils, assaults.
“Before it was ugly here. The tourists were attacked because the same people who took tourists to the restaurants later warned the gang members. Or if someone who was opposed (to the gang) or who lived in the opposite territory arrived, they would disappear,” explained Gustavo Méndez, who lives near San Diego beach and works with real estate agencies.
“There are no gangs anymore and it is nice here. Take advantage of the fact that the lots are going to get more expensive,” Méndez explained to González as he showed him one of the plots of land, a few kilometers away from the beach line.
González says he wants land near the first or second row of the beach. But the few that exist exceed $250,000.
“Before the regime I could get 30,000 ranches on the seashore. There was a man who sold it for 10,000 dollars because there were a lot of surfers and the beach was dead. There were no tourists. Not today. Today, if you're lucky, you'll find $200,000,” said a young waiter who works in one of the hotels on the beach.
San Diego has been recovering little by little with the investment of Salvadorans who live abroad or foreigners, while ambitious real estate projects are being built nearby. In front of El Amatal beach, about five minutes by car from San Diego, the Inversalex business group is promoting a real estate project worth 5 million dollars, for Salvadorans or foreigners who wish to invest in the “new El Salvador.”
According to Milena Mayorga, the ambassador of El Salvador in the United States, Inversalex, a company of American origin, plans to build a housing complex of 40 blocks of land in the coastal area.
Real estate agents, who are already working on selling spaces worth up to $50,000, speak of an accelerated push in the coastal area, from La Libertad to the department of La Paz, where the Oscar Arnulfo Romero international airport is located.
The increase in housing prices is not only seen in the tourist area. The same occurs with urbanizations in the municipality of Colón, La Libertad, where a few years ago the houses had an approximate price of 10,000 dollars and now they have risen to 35,000. In San Salvador, the capital, some homes in busy areas cost around $200,000, inaccessible for a Salvadoran whose minimum wage is around $360 per month.
El Salvador for foreigners
But despite the label of safe country that El Salvador now has, the economic numbers are still not in its favor.
With a high public debt and the lowest foreign investment in the Central American region, the Salvadoran government faces the problem of high real estate prices.
Bukele recognized this in a space organized on the social network
“We are experiencing a phenomenon in El Salvador in which no one gave a peso for it before, in which a home in a community with a destroyer house (house used by gangs) could be bought for 3,000 dollars. Of course, living there was impossible because the next day you would wake up dead. Now that El Salvador is completely pacified, these homes began to rise in price,” Bukele acknowledged.
The government has not released statistics on how many Salvadorans or foreigners plan to buy homes or land in El Salvador.
El Salvador faces a kind of real estate bubble, according to Bukele, where prices rise as there is demand. But he made it clear that his government does not plan to carry out price controls.
“If we begin to control the prices of what is there, and say 'houses cannot be sold for more than that,' the people who buy them are happy because the house they were going to buy for $100,000 was bought for $40,000. for price control. (…) But those who build houses are not going to build a house in the country again because they are going to say that in that country any day the president gets up and wants to give away the houses,” said the president.
His proposal to resolve the rise in real estate prices in the Central American country is to increase the supply. That is, build more or have more offers of land or homes so that demand levels out and prices improve.
Bukele added that in El Salvador there is already a “reverse migration,” with the return of Salvadorans abroad who want to buy their homes or invest in the country.
Salvadoran economist Rafael Lemus said that people “find opportunities to sell at high prices and earn good income” but then they do not find “a cheap place or a place to generate income.”
“We must not lose sight of the fact that access to housing is a right. Access to recreation spaces and places of leisure is also a right. (…) The government has an obligation to prevent housing from being used as a speculative means to increase profits and not to allow the development of other rights,” he told the VOACarlos Palomo, member of the Transparency, Social Comptroller and Data Association (Tracoda).
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