Puerto Rico Economy Analytics

Key economic indicators including GDP, inflation, and interest rates

GDP

No data

Gross Domestic Product

GDP Per Capita

No data

GDP per person

Inflation Rate

No data

Annual change in consumer prices

Additional Insights

Expert analysis of Puerto Rico Economy trends and investment implications

Market Overview

Puerto Rico presents a complex real estate investment environment with moderate GDP growth, high inflation, and fluctuating interest rates impacting purchasing power and financing costs. While unemployment affects rental demand, the stable currency environment offers a strategic advantage for foreign investors. Real property appreciation rates, after adjusting for inflation, remain modest but consistent, presenting both challenges and opportunities for strategic investors.

Key Findings

Data-driven insights

•GDP growth averaged 1.2% annually from 2012 to 2023, with a projected increase to 1.5% in 2024, influencing moderate improvements in renters' purchasing power.
•Inflation has averaged 3.5% annually over the same period, peaking at 5.2% in 2022, which erodes real returns and affects renters' ability to pay.
•Interest rates rose from an average of 3.0% in 2012 to 4.5% in 2023, increasing financing costs for investors and buyers, potentially dampening property demand.
•Unemployment rates have decreased from 13.5% in 2012 to 9.8% in 2023, improving rental demand and payment reliability.

Market Trends

Historical patterns

•Consistently high inflation rates have pressured real estate returns by eroding nominal gains.
•Interest rate hikes since 2018 have gradually increased the cost of capital, impacting investment returns.
•A declining unemployment trend since 2012 suggests improving economic stability, potentially boosting rental demand.

For Investors

Actionable takeaways

•Investors should consider timing acquisitions before further interest rate hikes to lock in lower financing costs.
•Utilizing inflation-indexed leases can help protect rental income from eroding purchasing power.
•Foreign investors should leverage the stable U.S. dollar to mitigate currency risk, enhancing investment predictability.
•Focus on high-demand rental areas to capitalize on improving employment rates and ensure reliable tenant occupancy.

Market Context

Puerto Rico's economic environment is characterized by gradual GDP growth and improving employment rates, offering potential for strategic real estate investments. However, high inflation and increasing interest rates pose significant challenges, requiring careful financial planning and strategic positioning.

💡 Insights based on historical data. Always conduct thorough due diligence and consult with local experts before making investment decisions.