International property investors have been buying real estate in Costa Rica for decades.  Its stable economy and half a century of uninterrupted democracy do much to strengthen the conviction of real estate investors.  Costa Rica real estate investors are bolstered by the growing tourism numbers and its 'Switzerland-like neutrality' (a reference to Costa Rica not having a standing army).  And the fact that the country has only 0.1% of the worlds land mass but a massive 5% of its biodiversity does nothing to hurt its image as a long-standing eco-tourism destination. 

With over 2 million international tourist arrivals in 2008 according to UNWTO, Costa Rica attracts about as many visitors as Nicaragua and Panama combined.  And discerning international property investors know what tourism does to property prices.

The buzz is also apparent in the online world.  There are more searches for Costa Rica real estate on google.com than there are for any other Central American country.  See more Costa Rica real estate indicators.  Given the global economic crisis we expect to see the 2009 tourism numbers come in lower.  But, especially when compared to its regional competitors, Costa Rica is still firmly on the world stage as an important tourism destination.

As testament to Costa Rica's success at attracting tourists, a number of large hospitality brands have set up operations.  This was particularly evident in the Guanacaste province in the north of the county, with luxury launch following luxury launch during the boom years, all in relatively close proximity to Liberia international airport.  There’s a good reason why other countries in Central America such as Nicaragua and Panama, market themselves as the 'next Costa Rica' seeking to emulate it’s growth trajectory.

Costa Rica real estate and the global downturn

But Costa Rica needs to keep on its toes as its neighbors roll out the map for retirees and international real estate investors.  And the international property sector hasn't been immune from the current global economic crisis.  For example in October 2008 the $800 million St Regis hotel project, planned for Playa Coyol and financed by Lehman Brothers, was put on hold with the marketing manager citing rising construction costs and uncertain financial conditions.  Other high profile suspensions followed in 2009 including the Rosewood Residences at Costa Carmel and La Punta Papagayo in Guanacaste.

Optimists will find some solace in the fact that Costa Rica's international real estate market has been shielded somewhat from the collapse in house prices witnessed in the developed world. (Our 2009 market update, for example, revealed small falls in asking prices for real estate in master-planned communities).  It’s relatively underdeveloped mortgage market for international real estate, formerly considered a weakness, has meant that it has avoided the rampant foreclosures that have tugged at the bottom of the market in the US.

But property pessimists will point to the high profile project suspensions and insist that with re-sales (sales from end-user to end-user) continuing to undercut developer direct prices in many projects, there could be more falls to come.

Costa rica real estate hotspots

The most talked about zone for Costa Rica real estate is the Guanacaste Gold Coast, Costa Rica’s northern Pacific coastline.  Guanacaste includes key investors hotspots such as Tamarindo (comprising 12% of the real estate developments in our survey); Coco, Hermosa and Papagayo (16%) and Flamingo (7%).

But it’s not all about Gunacacaste.  Puntarenas is also claiming a piece of limelight with Manual Antonio National Park one of the most visited of Costa Rica's parks and the tourism hub of Jaco comprising 15% of our sample.  The Central Valley (with 10% of developments in our survey) is another area attracting Costa Rica real estate investors looking for a high altitude metropolitan lifestyle.

There’s information on price points for real estate in the country across different categories at Costa Rica property prices.  Subscribe to the Reveal Real Estate newsletter for more Costa Rica real estate analysis and comparisons of property prices across Central America.