Overseas investment in Costa Rican real estate has grown steadily, largely driven by increasing demand in regions along the coast, including Puntarenas and Guanacaste. In 2013, foreign investment reached US$1.16 billion. While many different types of properties in Costa Rica are popular, condo developments are proving to be particularly popular.
According to the latest data, 43 percent of investment in Costa Rican real estate comes from foreign investors. During the last two years, condo developments increased by 84 percent. In total, foreign investments in Costa Rica increased by 15 percent year over year, according to data released by the Costa Rican Coalition for Development Initiatives.
Among the most popular areas of investments for foreign investors are the coastal areas of Guanacaste, including the popular resort of Tamarindo. Puntarenas, located along the Pacific Coast, is also a popular region for foreign investors. In particular, investors from Canada and the United States are proving to be major players in the purchase of investment property in Costa Rica. Demand for properties in Colombia, Nicaragua, and Panama is also on the rise.
In order to meet rising demand, developers are now focused on building new gated communities in popular areas, including the Gold Coast of Guanacaste. While investors have shown strong interest in these regions, they are particularly focused on choosing reputable developments that are capable of demonstrating a strong track record for producing high quality properties. Gated communities tend to be popular among foreign investors because they protect owners from the potential downfalls of purchasing a lone-standing property, including management problems. Owners are also able to benefit from the income potential offered by gated communities. Combined with the fact that gated communities also offer the security, services, and amenities desired by foreign investors, they have quickly become a sought after commodity.
Over the course of the past 15 years, Guanacaste has experienced dramatic changes and is now experiencing what many are terming as a second real estate boom. Prior to 2000, Guanacaste was primarily a destination for surfers who were willing to navigate the unpaved roads in order to access the region’s renowned waves. By 2002; however, things had begun to change. The opening of the Daniel Oduber International Airport in the provincial capital of Guanacaste, Liberia, made the region far more accessible. As the roads between San Jose and Guanacaste were improved, visitors began to target the area. Soon, property development increased and prices began to triple.
Demand from buyers in North America did begin to decline with the global financial crisis; however, prices have since begun to rebound. Even so, prices in the region are still below their peak levels. Beach-front homes that once were listed at US$300,000 are now selling for around US$125,000. As a result, buyers are able to take advantage of significant investment opportunities.
According to data released by the Federated Association of Engineers and Architects, condo developments are rapidly gaining in popularity, comprising approximately 1.6 million square meters over the last two years alone. Approximately 20 percent of those developments were located in the district of Heredia. High rise buildings are now a much more common sight in central areas, especially those located industrial parks. Four other cantons, or districts, in San Jose were also popular for condo developments, including Santa Ana, Goicoechea, Central, and Escazú.