Bright Prospects for Commercial and Residential Property in Costa Rica
Article: The real-estate market in Costa Rica is showing distinct signs of looking up.
Prior to the global financial crisis of 2008, the real-estate market in Costa Rica was booming for many years. It took a major hit immediately after the crisis but is now recovering with a good future outlook because prices have been stabilizing. </intro>
Property market analysis
Historically the Costa Rican market has been profitable, delivering returns of between 15% and 20% annually from 2000 to 2008.
- Because of the hit, house prices are at their most affordable and investors are once again buying in the expectation of future capital appreciation.
- Ronan McMahon of International Living ranked the Southern Zone of Costa Rica 3rd of 27 on his list of “The World’s Best Real Estate Markets for 2012”.
- The results were based criteria such as outstanding natural beauty and affordability.
- International Real Estate Investments ranked Costa Rica as the best country for international real estate investment in 2013 because of its stable political situation, strong property rights for foreigners and proximity to North America (particularly to the US and Canada).
Many of the baby boomers in the United States are looking for properties abroad – and demand in Costa Rica should remain strong.
The real-estate outlook for 2013 in Costa Rica
A recent poll by a real estate firm in Costa Rica showed that 2013 could be an exceptional year for both commercial and residential property.
- After a strong closing in 2012, 2013 has started well with a lot of attention being drawn by houses in the price range of USD $200,000 to $450,000.
- The study also showed that there was increasing interest from Europe for projects for reforestation for trees like teak and cypress.
- Some agencies have also reported increasing interest in commercial property, which is located along the coastal region.
- Foreign investors are being attracted to Costa Rica to diversify their investment portfolios and recoup losses incurred in other markets.
Reasons to invest in property in Costa Rica
Real estate is a tangible asset and retains a value that is independent of the value of any currency. Moreover, it is an excellent hedge against inflation.
- 2012 saw a record number of tourists arrive in Costa Rica and 2013 is expected to be even better. This should have a positive impact on the real-estate market.
- Mortgage rates in the United States are at an all-time low and this should encourage people to leverage their assets and reinvest the proceeds in the more profitable Costa Rican real-estate market.
- Falling unemployment in the United States should encourage more people to look overseas for investment opportunities.
- There is increasing interest in many segments of the real-estate market, including condos and luxury real estate.
- There is also a great deal of interest in commercial property, mostly in the Central Valley and San Jose (the commercial center).
- Property investment in Costa Rica is relatively straightforward for foreign investors from any country because they can invest on the same terms as the locals.
- The government is also providing breaks on taxation and other incentives to encourage the inflow of foreign investment.
The bottom line
By the look of it, 2013 is going to be a good year for the property market in Costa Rica – both commercial and residential. If you are looking for overseas investment opportunities in property, this country deserves serious consideration.