Foreign investment in Costa Rican property grows 43%
Spurred on by rising demand in the coastal regions of Guanacaste and Puntarenas, overseas investment in Costa Rican real estate has grown to US$1.16billion in 2013, with condo developments growing in popularity
Real estate investment in Costa Rica reached a record US$1.16billion last year, with 43% coming from overseas investors, particularly from North America, according to the latest data.
Costa Rican condo developments are also proving popular, rising 84% in the last two years, separate figures reveal.
In total, all foreign investment received by Costa Rica grew 15% over 2012, according to data from the Costa Rican Coalition for Development Initiatives (CINDE) published on the Centralamericadata.com website, although other press reports put the figure at US$1.6billion.
Cinde Director, Gabriela Llobet, says, “Investing in real estate in 2013 reached a record US$1,160million. Of these, at least two thirds correspond to the purchase of land, property and business of local residents not foreigners.”
Among popular areas for foreign property buyers are the coastal areas of Guanacaste, in the north-west, which includes the popular resort of Tamarindo, and Puntarenas on the Pacific Coast.
Investors from the United States and Canada are the major foreign property buyers in Costa Rica, but demand from Panama, Nicaragua and Colombia is rising steadily.
Developers are building new gated communities in Guanacaste’s Gold Coast says Christian Desmond, of developer Punta Playa Vistas. “Investors looking for investment property in Costa Rica are selecting reputable developments with a long standing track record in producing quality homes. Gated community developments protect buyers from many of the pitfalls of purchasing a lone-standing property which are often fraught with people issues and management issues.
“Gated community properties in terms of income potential have added security in both property protection and management processes. Gated communities offer exactly what investors are looking for, and further, they offer residence all the amenities, services and security they require for either their precious vacation time or as a permanent residence,” reports the Costa Rica news website.
In the past 15 years the landscape of Guanacaste has changed dramatically and is now undergoing “a second real estate boom”.
Prior to the early 2000s, when developments started springing up, Guanacaste was mainly visited by surfers willing to travel the bumpy, unpaved roads in search of the perfect waves. In 2002, the Daniel Oduber International Airport opened in Liberia, the provincial capital of Guanacaste, the roads from San Jose to Guanacaste were improved and property development and prices tripled in the five years to 2008.
When the global financial crisis hit, North American buyer demand dropped in Guanacaste, but since 2008, prices have starting to rebound. However, they are still far off peak levels, with beach front homes that were listed at up to US$300,000 now selling for around US$125,000, says the Costa Rica News.
Condo developments are fast gaining in popularity and have accounted for 1.6 million square metres in the last two years, up 85% on the previous two years, according to data from the Federated Association of Engineers and Architects (CFIA), published by Nacion.com.
A fifth of them were in the central ‘canton’ (district) of Heredia, followed by four cantons in San Jose: Santa Ana (18%), Goicoechea (14%), Central (9%) and Escazú (9%).
“High rise buildings are more common in central areas of populous cantons or in areas close to industrial parks or other businesses that attract labour,” the report says.