Costa Rica Real Estate: Has The Boom Ended Or Is This The Time To Invest?
January 26th, 2010 | by admin |The United States housing debacle appears to have bottomed out. At last. From the peak in the summer of 2006, nearly three and a half years have elapsed.
Seems like nearly everyone in the Western world has been affected by the current economic troubles.
Of course, Costa Rica has felt the impact of the severe economic downturn in America and Europe. Property closings have slowed dramatically and in some areas along the Pacific coast cash-strapped Americans are selling their tropical homes at steep discounts.
Why was Costa Rica real estate so popular in the first place?
One of the smallest countries on the planet, Costa Rica is known throughout the world for its sandy beaches, picturesque coastal landscape, and its extraordinarily diverse fauna and flora. In fact, though it is only about the size of West Virginia, nearly 20%of the plant and animal species on earth are found in that Central American country.
Additionally, with the Atlantic and Pacific oceans bordering its east and west coasts, there is renowned deep sea fishing , diving, surfing, and sunsets, not to mention great parks and volcanoes.
Every year it is one of the hottest tourist destinations in Latin America. Most visitors are from Canada and the U.S., of course, but there are also thousands of European travelers. To help it serve the booming tourism industry, tourist attractions have popped up on both coasts. This in turn has caused a sharp rise inCosta Rica real estate value over the last decade or so since land is one commodity that is not plentiful there.
There is more, Costa Rica was one of the world’s first countries to understand the importance of sustainability. That is a big drawing card for many travelers. The country has adapted to its tourist patronage by developing and welcoming the international community. Condo construction, single family homes, and subdivisions catering to expats accelerated dramatically in the last 10 along the Gold Coast. With that boom came increased land prices.
Increasingly, retirees from the Western world see it as the perfect place to spend their later years. With mile after mile of sunny and sandy beaches, nearly 800 miles of coastline, 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, many other people like to have a second home there, too.
What parts of Costa Rica have been the most popular for buyers or investors of Costa Rica real estate?
The north and central parts of the Pacific coast, in particular, with great weather and numerous amenities, has been the most popular area for tourists for a number of years. The need for developed property meeting the needs of the growing influx of vacationers and expat community has led to a large rise in prices of homes and land there. Hotels, resorts, restaurants, bars, and places for adult and family oriented fun have sprung up dramatically. This has led to an acute shortage of land in some places that has brought increased upward pressure on real estate prices.
The Central Valley have also been popular places because of the many conveniences like great malls, shopping, and terrific weather. About 40% of the country’s population centered near its capitol city, and increasingly short supplies of land, property values were less adversely affected than thePacific Coast.
What are the future prospects?
Despite today’s dismal economic climate in the States and Europe, the general perception is that there will be a large rebound in Costa Rica land prices.
Why? One reason is that, in comparison to the United States and the European continent, real estate prices, particularly on sunny, tropical coastlines, remain very reasonable, just a fraction of the cost elsewhere.
Second, foreign investment continues to flow into Costa Rica. America and Europe have long been important business partnersand many international companies have impressive stakes there. Intel has large computer chip plants that now produce more revenue for Costa Rica than any other source. Walmart owns virtually every grocery chain in the country and is building large stores in many places. HP has a large presence. And dozens of other world class companies, as well. Many of these companies have been dramatically increasing their work forces in Costa Rica even as they are reducing their American and European employees.
Not to mention China. Its presence is increasing substantially, as well. It has taken advantage of the softening of real estate prices and investing in this Latin America country. There are now several thousand of Chinese living in this little country and, more and more, they are buying up real estate.
Finally, Costa Rica remains a very popular tourist destination and, though its market has been adversely affected, two things remain constant: (1) The supply of available land is limited and the demand for quality affordable property remains; and (2) Location, location, location still appeals to buyers.
The smart money is betting on the land of Pura Vida.
