Costa Rica Real Estate – A Booming Decade-But Are The Boomtimes Over?

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Costa Rica is a major tourist attraction for people from around the world but, primarily, the U.S. and Canada. Indeed, tourism accounts for nearly eight percent of its gross domestic product. This tiny country, only about the size of West Virginia, is world-famous for its warm, sun drenched beaches and beautiful tropical mountains and landscape. Though it encompasses only one tenth of one percent of the planet, it is home to an incredible diversity of plants and animals. In fact, nearly one of every five species of plants and animals on the globe is found here. There are more kinds of butterflies in this little place than on the entire African continent and nearly the same number of species of birds as in the continental United States. It is no wonder, then, that Costa Rica draws tourists like a magnet. This country, which has been a democracy since it cast off its Spanish conquerors, has acquired the status of a tourist hot spot in Central America. The boom in the tourism industry has contributed positively to the growth of Costa Rica real estate over the past decade.

Most investors express a preference for areas that are attractions for tourists and, in particular, its beautiful 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.

The demand for real estate is centered mostly in areas where the tourist influx is large especially along the Pacific Ocean. The purchase of vacation property and real estate for relocation by expatriates are two main reasons why the property prices have gone up. In addition to the coasts, money is flowing into investments on farms (called fincas), mountain properties, and vacation rentals. Increasingly, Costa Rica is also being seen as a retirement destination by many retirees hailing from cold countries in Europe as well as America and Canada. The highly stable democratic political system and the beauty of this country attract real estate purchasers from around the world who want to have a piece of paradise to themselves. Costa Rica is one of only two countries in the world without an army, the other being Switzerland, and is extremely forward looking. The government is committed to sustainability and in a few years, Costa Rica will be the first country on the planet to have a zero carbon footprint. No wonder so many people fall in love with this place.

A number of years ago, the country realized the benefits of sustainable development and tourism. Unlike many other countries, Costa Rica has learned the lesson that unregulated exploitation of resources is ultimately detrimental. Wisely, in the face of sometimes intense pressure, it refuses to allow oil exploration off its coasts. Tropical forests, once cut or burned for little farms, are returning. As more and more of the international community is encouraged to visit, investors from around the globe have found that Costa Rica is a wonderful real estate market. And, indeed, over the last decade there has been a real boom in development along the Pacific coast.

How has the recent worldwide economic downturn in the States and Europe affected Costa Rica? Not surprisingly, subdivision and condominium development have dramatically slowed or even been put on hold, and in some parts along the Pacific coast American second-home buyers, now cash-strapped, have been selling beautiful properties at large discounts. These are properties that were by American and European land prices good buys when made. Now they have become extraordinary opportunities.

Despite today’s uncertain economic climate in the States and Europe, the general perception is that there will be a large rebound in Costa Rica real estate. Why? One reason is the incessant flow of investments based upon the lucrative returns to be had from property development. Another is that, in comparison to the Unites States and Europe, real estate prices, particularly on sunny, tropical coastlines remain incredibly reasonable. Land prices along the coasts are still just a fraction of the cost elsewhere. Further, real estate investors have found extraordinary returns on their investments over the last decade.

The largest rise in property prices and the biggest decline due to the recent recession have been along the Pacific coast. The beautiful Caribbean coast remains largely undeveloped so the run-up in prices was not as rapid. 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 Costa Ricans move to the urban areas.

The author, Victor Krumm, writes about spectacular Costa Rica and has an informative websiteCosta Rica Vacations. Check out the prettyCosta Rica Real Estate

categories: costa rica real estate,costa rica,costa rica homes,real estate,investment,houses,retirement,condominiums,land,tropical destinations,travel,tourism,beaches,family

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