The Costa Rican housing market had seen steady improvements during the period 2012-13, thanks to the strengthening economy and housing market in the United States. Due to the absence of official house price statistics, it is hard to assess the movements of house prices. However, local property experts affirm that median condominium and home prices rose during 2012 and the first half of 2013, while prices for low-end properties dropped significantly over the same period.
According to an article by Michael Klein published in the World Property Channel, over the past few years: The luxury market continues to see robust growth as foreign homebuyers flock into the domestic market.
Property prices in Costa Rica vary considerably, depending on size and location. The Central Valley, the greater metropolitan area (including San José, Alajuela, Heredia and Escazú) where most of the nation’s businesses are located, and along the Pacific coast are home to some of the most expensive and fastest-selling properties in Costa Rica. On the other hand, the least expensive properties can be found in new developments in the Costa Rica’s southern region, such as the Osa Peninsula.
Housing market outlook
The Costa Rican property market is expected to continue its positive growth in 2014, according to local property experts like CRREC and Re/Max Ocean Surf.
“This is an exciting time for real estate in Costa Rica and for my growing team. Buyer confidence is up, and this definitely is having a positive effect on our market. Moreover, as the overall global housing market improves, our client base grows since Costa Rica attracts buyers from around the world due to its foreigner friendly property laws and high standard of living," said Simmons.
Costa Rica has some of the best housing stock in Latin America. Less than 10% is considered to be in bad condition. 74% the total housing stock is owner-occupied, and 17% is rented.
The economy was estimated to have expanded by 3.5% in 2013, after registering real GDP growth rates of 5.1% in 2012, 4.4% in 2011, and 5% in 2010, according to the International Monetary Fund (IMF). The economy is projected to expand by 3.8% in 2014.
Foreign investors buoy the housing market
Foreign homebuyers from the United States are driving up property demand in Costa Rica. “Higher median prices in the USA are now driving buyer interest in higher priced and luxury real estate properties, particularly for ocean view, beachfront, and near beach properties,” said Chris Simmons, the founder of Re/Max Ocean Surf. “Buyers from hot markets in the USA like California and Florida see Costa Rica as offering great value in comparison to similar beach real estate in the United States. We still have luxury condos for under $200 per square foot, pricing that is rare in the USA,” Simmons added.
There has also been increased interest from Canadian and European buyers. During the end of 2013, there is about 13% increase in the number of European investors compared to the same period last year, according to Costa Rica Real Estate (CRREC), one of the leading real estate firms in the country. While the majority of the total real estate transactions in 2013 still come from the United States, there is a noticeable increase in the number of Canadians buyers.
"We find that with the strong Canadian dollar, more Canadians are looking outside their homeland for investment with the promise of affordable living in paradise and a great escape from winter`s gripe,” said Brett Elliott, CEO of CRREC.
Aside from its scenic beauty and lower cost of living, many Costa Ricans, foreign investors and High Net Worth Individuals (HNWIs) are increasing being attracted to invest in the property market mainly because foreigners are entitled to the same ownership rights as Costa Rican citizens and there are no property taxes and no residency restrictions.