Gran Venetian


Since our initial review of the Gran Venetian project in early 2007, we have been recommending a "pass" on potential investments in the project.

Over the past 15 months, we have published updates to our initial review and advised that the risk to the project has increased since our initial review.

We have now been advised that the developer will have to financially restructure in order to complete the project. And that sub-contractors are not being paid.

We are downgrading our recommendation to "sell" for any existing purchasers. Our recommendation to potential purchasers remains to "pass". We continue to advise mortgage providers not to provide mortgages for investments in this project.

Canadian Government Urged to Review Risk






HSC Financial Inc. has requested that the Canadian government, through its Foreign Affairs department, review its existing published travel report for Canadians in Mexico. At present Foreign Affairs is advising that Canadians "exercise a high degree of caution" while in Mexico.

We have advised Foreign Affairs that prior to making substantial investments in a foreign country, Canadians have a right to determine the level of risk with their investments and their personal safety.

We have made the request to Foreign Affairs as a result of what may be an increased risk profile for Canadians and other foreigners in Mexico as evidenced by the following:

1. A highly visible series of recent deaths of Canadians in Mexico including, but not limited to, Bouabal Bounthavorn of British Columbia, Domenic & Nancy Ianiero of Ontario, Janette Lerch of Ontario, and Jeff Toews of Alberta. In addition to several Canadians dying, under mysterious circumstances in Mexico, other foreign nationals have recently been murdered in Mexico.

2. Canadian investors in time-share programs who have not had their contracts honored

3. Potential developer and builder malfeasance at major building sites including the Grand Venetian and Icon developments in Puerto Vallarta.

4. Increased reports of police corruption in specific resort communities, including Puerto Vallarta, Mexico

5. Increased reports of drug related violence in several Mexican communities including assassinations of several high ranking law enforcement officials.


HSC Financial Inc. provides detailed risk assessments to Canadian investors and to Canadian and American lenders financing investments in Mexico. We rely on country risk assessments provided by, among others, the Canadian government and rating agencies. These assessments need to be complete and up-to-date.

Buyers Market in the US Bodes Well For Second Home Purchasers

During the run up of real estate prices in the U.S. and Canada between 1996 and 2006, HSC Financial became bullish on making second home and other real estate investments along the west coast of Mexico. American and Canadian investors could access equity in their first homes or use available cash to make solid, good value investments in Mexico. Mexican prices did not escalate rapidly until the period 2004.

In the past 15 months there have been significant changes in the structure for real estate investments across Canada, the US and Mexico.

The most significant change is the decline in property prices in all traditional retirement and investment home markets in the US. since early 2007. Miami and Las Vegas, which experienced a burst of speculative building during the housing boom, led the way with annual declines of 22.8 and 21.7 per cent, respectively. Prices are also down sharply in California – Los Angeles (off 19.4 per cent), San Diego (19.2 per cent) and San Francisco (17.2 per cent). The result is that there are now some excellent investment opportunities available to American stateside. Those with access to money do not need to invest in Mexico to get good investment value.

The second change is the drop in all housing prices across the United States and the leveling off of housing prices in Canada. U.S prices are down nearly 15 per cent from their July, 2006, peak. Home equity loans have declined. Investors must now rely more on their own capital.

The third change is the strengthening of the Canadian dollar from 64 cents U.S. just a few years back to parity. There are few good real estate investment values available to Americans in Canada, compared to years past.

As a result of these changes, HSC Financial expects to make more recommendations for Americans (and Canadians) to make real estate purchasers in their domestic markets rather than in Mexico. We are of the opinion that Mexican investment real estate will have to drop by at least 25% in price to justify new investment. We also expect that Americans, who are heavily invested in Mexico, to re-balance their portfolios by taking advantage of lower cost investment properties in the United States. We are of the opinion that, over the longer term, U.S. real estate investments will outperform Mexican investments on a risk adjusted basis.