One of the tiniest countries in the world, Costa Rica is famous for its sandy beaches, picturesque coastal landscape, and its incredible diversity of plants and animals. In fact, though it is only about the size of West Virginia, nearly one of every five plant and animal species on the face of the globe are found in Costa Rica. Tourists flock to this little country in droves each year making it one of the hottest tourist destinations in Central America. Most visitors are from America and Canada, of course, but there are also thousands of European travelers. In order to cater to the booming tourism industry, hotels, restaurants, pubs, shopping malls, and other tourist attractions have popped up alongside beaches and other hot spots. This in turn has caused a sharp rise in Costa Rica real estate value over the last ten years owing to the fact that land is one commodity that is not plentiful in Costa Rica, a country with just one tenth of one percent of the world’s land mass.
Most real estate investors and second home buyers are concentrating their attention in areas that are attractions for tourists and, in particular, its magnificent Pacific coast. The large scale purchase of prime property along beach fronts (all of its beaches are public), mountain properties, farms (called fincas) and vacation rentals by expatriates have contributed to a steep hike in real estate prices in the most coveted areas.
For more and more Americans, Canadians, and Europeans, Costa Rica is seen as the ideal place to spend their retirement years. With lots of sunny and sandy beaches (nearly 800 miles of coastline and most beaches virtually deserted), beautiful mountains always close at hand, nice weather, a stable and democratic political system, low crime rates, excellent medical and dental providers and facilities, and high human development indices, it is a prime draw for retirees. An increasing number of investors have seen the potential of real estate development in Costa Rica and putting money into real estate.
For many years now, Costa Rica has understood the importance of sustainability. The country has adapted to its tourist patronage by developing and welcoming the international community. Development of condominiums, single family homes, and subdivisions catering to expats accelerated dramatically in the last 10 years, particularly along the northern and central coasts of the Pacific. With that boom came increased land prices, though still far, far lower than in comparable areas in the United States and Europe.
The severe economic downturn in the States and Europe has impacted Costa Rica as well. Condo and subdivision development have slowed dramatically and in some parts along the Pacific coast, American second-home buyers, now strapped for funds, are selling properties at very large discounts. One person’s challenge is another person’s opportunity.
Every contraction sets the stage for recovery. Costa Rica is expected to boom again due to the continuing tourist influx into the country, the high returns that real estate investment yields here, and the increasing scarcity of land in some places. Over the last decade, many investors have seen the value of their investments soar, though there is in fact a pull-back today in some areas because of the worldwide recession. Even many small investments have proved to be lucrative. Tempering the future boom a bit, though, may be that the fact that property in highly desired areas is becoming increasingly scarce. On the other hand, this may lead to increased investment in prime real estate inland.
The steepest rise in property prices and the steepest decline (due to the U.S. and European recession) have been along the Pacific coast. The beautiful Caribbean coast remains largely undeveloped so the run-up in prices was slower. And real estate prices in the Central Valley containing the largest city, San Jose, and some 40% of the country’s population have not been significantly affected because of the acute shortage of available land and continuing demand as more and more Ticos move to the urban areas.
|
|