Costa Rica Real Estate – More And More Sought After

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.

Costa Rica is a tiny country with its land mass constituting just one tenth of one percent, 0.1%, of the land on the planet. This relative scarcity of available real estate in the face of development growing out of tourism has led to a boom in the real estate business over the last decade along the coasts, in the mountains, and in urban areas.

The demand for real estate is concentrated mostly in areas where the tourist influx is large. This has been largely the north and central Pacific coast. 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.

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.

How has the economic downturn in the States and Europe impacted 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, are listing beautiful properties at huge discounts. These are properties that were by American and European land prices good buys when made. Now they have become extraordinary opportunities.

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.

Most investors and many folks buying second or retirement homes prefer the more developed Pacific coast. Prices have risen the most there due to the increased demand though some of the most developed there are temporarily witnessing some declines in prices. The Caribbean coast is not very developed yet and prices are often substantially lower than on the Pacific. Though most tourists head west, nearly 40% of the country lives in or around San Jose, the capitol city, and real estate prices there have not been significantly affected by the world’s recession because available land is at a premium as more and more Ticos move from the country to the city.

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