Signs of Growth in Costa Rica Luxury Market
The clock has been reset in the Costa Rica real estate market. Some experts see prices rolling back at least eight years - great news for savvy international buyers, not so great for sellers.
From 2000 to 2012, property was found to be 50 to 70 percent less expensive than comparable properties in the United States. There have been plenty of cases, throughout the last decade, where Costa Rica real estate values have doubled or even tripled. But those frenzied, super-boom days of buying a property this month and flipping it for a $30,000 profit next month are gone. Snapshot
There is no need to reiterate the devastating effects the housing crisis had on Costa Rica. What is important for potential international buyers to realize now is "comparative value," but we will look at that shortly. For now let's take a look at where the Costa Rica market is currently.
The Costa Rica real estate market has reported steady improvements during 2012 and 2013, primarily in reaction to a strengthening economy and housing market in the U.S. Hard statistics are difficult to come by and to qualify in the Costa Rica market as the country has no national Multiple Listing Service (MLS). It takes a little ground work to uncover qualified statistics by reviewing real estate websites and talking with real estate agencies in Costa Rica's various regions.
Research reveals that, similar to U.S., lower and median priced properties saw active sales during 2012 and the first two quarters of 2013. While median condo and home prices are increasing, lower priced properties declined considerably. Based on this and other indicators, industry players in Costa Rica expect a positive trend in both sales and pricing.
In the most recent Costa Rica survey, one consistent statement that stood out is that North American buyer confidence is definitely up, and this is having a positive effect on the Costa Rica market. When property owners in their home countries see their real estate investments on the rise, they are more likely to invest abroad in a second home or income property.
Another consistent point conveyed in this latest survey is that apart from second home buyers and straight investors there are increasing ranks of baby-boomers on the hunt for real estate and discovering the appeal of life in Costa Rica. These boomers appreciate not only the scenic wonders, lower cost of living, high standards of living, but also see the attractive investment potential in real estate.
Traditionally, one of the main attractions for Costa Rica real estate investors, aside from its natural beauty, is that nationals and foreigners have equal rights in Costa Rica when it comes to property law. Further, there are no property taxes and there are no residency restrictions -- you don't have to live here to own property.Luxury Market
Costa Rica's overall profile continues to grow with its appeal as an eco-friendly destination as well as a place to find real value, especially in the luxury real estate market.
Interestingly, while lower priced properties dropped or flat-lined in recent years, the luxury real estate market has seen a surge, in spite of the downturn. High Net Worth Individuals (HNWIs) have discovered that they can find not only exceptional value in the luxury market in Costa Rica, but they also can find unique experiences which HNWI's treasure.
It wasn't just luxury real estate that ticked upward, but the entire luxury market in Costa Rica saw a growth curve.
In 2011 when Costa Rica was still struggling, along with the rest of the world, economically speaking, the number of luxury cars sold jumped sharply. There was a 15 percent increase in luxury cars sales compared to 2010 and more than half of those luxury sales were to internationals.
Luxury cars, luxury real estate, luxury apparel along with luxury hotels and resorts, have all seen excellent growth over the past few years and industry professionals expect the luxury market to experience a continued upward trend as more wealthy internationals see Costa Rica as a place to invest and leisure.
Costa Rica's luxury real estate is celebrated by the inspired talents of local and international architects. The unique contemporary and Spanish Colonial flavor and high quality of Costa Rican architecture is prevalent in a large number of ultra opulent estates that have been built in recent years to satisfy the increasing numbers of wealthy internationals discovering Costa Rica.Comparative Value
What can you get for $300,000 in Costa Rica? On Costa Rica's Pacific Gold Coast, you can have an eco-friendly community, ocean view terrace, 2 to 3 bedroom, 2-story home, 2+ baths, gated community with 24 hour security, club house with bar and a large horizon pool, access to or an onsite private bilingual school, natural tropical reserves on site, in a development that also offers financing, and only an hour's drive or so from an international airport.
Beach condo's have always been popular in Costa Rica but metropolitan condos for lifestyle, income property and investment have become very popular in recent years. A $300,000 investment in metro San Jose affords you a 2,000+ square foot condo in one of the prime locations, with granite counters, modern fixtures, three bedrooms, three baths, 24 hour manned security, protected parking, pool, valley or city views, one hour to the airport and minutes to every metro amenity possible.
In summary, Costa Rica weathered the downturn remarkably well. While lower priced properties saw a definite decline in price and sales, the median market dropped initially, flat-lined, then saw a resurgence in activity in 2012 and so far in 2013. The luxury market as a whole unexpectedly saw very nice positive growth during this period and industry experts see this trend continuing as Costa Rica continues to improve its international profile.
Michael Klein works as a writer for three of the leading Costa Rican on-line English news publications, as well as Costa Rica Real Estate. He and his wife Dyan also own and operate San Ramon Properties, the #1 ranked website for their region.