The Real Deal Miami

Latin American luxury home market unfazed by Zika

Poor people are more exposed than luxury home buyers to the epidemic, linked to birth defects

April 30, 2016 09:30AM

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Jade Park in Asunción, Paraguay (Credit

Rendering of Fortune International’s Jade Park condominium in Asunción, Paraguay (Credit

The Zika virus epidemic has done little, so far, to slow sales of luxury homes in Latin America and the Caribbean.

“I was recently in Paraguay, and Zika wasn’t that much talked about. But everybody, including myself, puts on a lot of [mosquito] repellent before, during and after you go out. They are all very concerned about being infected with dengue or Zika,” said Edgardo de Fortuna, president and founder of Miami-based Fortune International Group, told Mansion Global. “People go about life in a regular way; they just take precautions.”

De Fortuna said Zika fears have failed to faze Fortune International’s 120-unit luxury condominium development in Asunción, the capital city of Paraguay. Buyers have reserved 37 of the units during pre-construction phase of the development, called Jade Park, an affinity-style project attracting affluent Paraguayan retirees.

The high-end housing markets in South America, Central America and the Caribbean have economic and demographic repellants against the Zika outbreak, linked to severe birth defects.

Compared to luxury home buyers, poor people who lack air conditioning and window screens are far more exposed to mosquitoes carrying the Zika virus, and infection is a major threat only to women who become pregnant, not to older adults who comprise much of the luxury home market. Zika produces no more than flu-like symptoms in people other than pregnant women.

“I think most people looking for luxury homes in the Caribbean, generally, have already had children,” Antigua-based said Nuri Katz, president and founder of Apex Capital Partners, told Mansion Global.

Katz is developing a cluster of luxury villas in St. Kitts with unit prices averaging $1 million and markets mainly to older Americans unexposed to the risk of Zika-induced birth defects.

“It might affect tourism because tourists have options to go anywhere. But a person shopping for luxury real estate in the Caribbean isn’t thinking about that,” Katz said.

The World Health Organization said in its April 21 situation report on the Zika epidemic that “in the Americas region, the geographical distribution of the Zika virus has steadily widened since the presence of the virus was confirmed in October 2015.”

As of April 26, Zika travel advisories issued by the Centers for Disease Control (CDC) covered seven countries in Central America, nine in South America, and 18 countries and territories in the Caribbean.

While transmission of Zika is widespread in the Americas, birth defects associated with the virus are geographically concentrated in Brazil. The mosquito-borne Zika virus is the suspected cause of microcephaly, a fetal malformation that leaves newborn babies with abnormally small heads.

The World Health Organization (WHO) reported April 21 that Brazil had 1,168 cases of microcephaly potentially associated with the Zika virus, far more than any other country. French Polynesia was a distant second with eight such cases and Colombia third with seven. Martinique and Panama had three each. Two cases linked to travel to Brazil were detected in Slovenia and the United States

“Northeast Brazil is where the biggest concentration of mosquitoes is and where the highest incidence of birth defects has been,” said Scott F. Pryce, CEO and co-founder of TRX Investments in Miami, part of Brazil-based real estate company TRX Group, told Mansion Global.

But among wealthy buyers of high-end Brazilian homes, “I don’t think Zika is going to be a major issue,” Fernando de Nuñez y Lugones, executive vice president of the ONE Sotheby’s International Realty’s luxury condo development division, said in an interview with Mansion Global.

“There are regions in the north that could be affected, but in the main capitals like Sao Paulo and Rio, that’s not an issue,” said de Nuñez, a onetime resident of Brazil who still owns an apartment in Rio de Janeiro.

De Nuñez said that coastal areas in the northeastern Brazil tend to attract foreign buyers of luxury homes from such European countries as Spain and Italy.

“In the rest of the country, the foreign buyer almost doesn’t exist,” he said. [Mansion Global] — Mike Seemuth