The US state department estimated in 2014 that 6.32 million Americans are living outside of the country’s borders in over 160 countries. 13,000 of those are estimated to move to Costa Rica every year, with roughly 60,000 U.S. expats out of an estimated 250,000 expats living here at any one time.
New construction in Costa Rica grew by 14% in 2015, the year that marks the upturn in the real estate market since the 2009 financial crisis hit Costa Rica and the world. In 2016, over all construction works increased by 4.2% and permits went up by 15.1% around the country. Of this, 45% of the increase was in high rises, condos, villas, single family homes and private construction projects. What this means is that real estate in Costa Rica has again reached boom times.
Trends in the Costa Rica real estate market
A 2015 Globe and Mail article stated that Costa Rica is finally recovering from the drop in real estate values as a result of the 2009 recession in the US. Since this time, our Osa Tropical Properties real estate office has seen a big increase in the number of people walking through our doors to purchase property. These buyers are adamant that there is no where else in the world that they prefer to invest their money, for a myriad reasons. Many realtors are optimistic to say that Costa Rican living is back with a vengeance. Almost anywhere you go, you can overhear people discussing the upturn in the market with excited expressions.
Purchases of property rose 14% in 2013 from the year previous, yet in 2017, houses are still a bargain. What does this mean? As realtors in the Southern Zone region for the past 12 years, watching the rising action in the market in recent years after much time at a near standstill, we recognize the increasing trend and are suggesting that buyers get in while the real estate market is saturated with motivated sellers, a market that we can see in 2017 will not last for much longer.
International tourism to Costa Rica has been on the rise over the past three years, each showing an increase of 4% each year since 2015. This growth is increasing demand for vacation rentals, where the average gross rental yields throughout Costa Rica are about 6-8%. With dozens of mom and pop property and rental management companies in the Southern Zone, as well as some more established ones, statistics for the region may be hard to come by; but the growing variety of successful businesses are a testament to the trend.
Who is buying?
The buyer profile has been changing in recent years. Before the recession, investors into Costa Rican real estate were largely people with extra money who were flipping property with great success. They were the real estate mavens who knew that ecotourism and wellness travel were growing trends and that Costa Rica would be the capital of this for the world. On November 30, 2015, during the Paris climate talks, the French government illuminated the Eiffel Tower with the phrase “100% Pura Vida” to mark Costa Rica’s then 255-day stretch of using only renewable resources for the nation’s power grids.
The typical profile of the current market/post-recession buyer is typically from the baby boomer generation, wishing to maximize their retirement nest egg. They are pre-retirement but thinking of their future. In addition to their numbers are a growing demographic of more youthful investors, typically between 35-50 in age, and thinking about their long-term future. This group includes families who want a more wholesome place to reconnect with one another, themselves and with nature. They are generally able to work anywhere because of the mobility of current technology and have reassessed their priorities to include a new location that provides a new adventure, even if just for a couple of years.
Whatever your reasons, your interest in Costa Rica is warranted and you are in good company. Our client profile is an intelligent, entrepreneurial person who cares about their health, well-being, and investment profile. These are the forward-thinking people who want to have an escape from the typical Western lifestyle to a life filled with community, serenity and pure living. This is the land where dreams are made. Call our office today to learn more about how easy it is to earn this great investment for your future.