Costa Rica’s real estate market took off over the past decade, but it has come to a halt. Many developments are now being delayed, and buyers appear to be scarce. People in the industry feel that this slowdown is just temporary, though, as people still want to live and travel in the country. For more on this, read the following article from Property Wire.
Property prices are falling and real estate developments are being delayed as the market in some parts of Costa Rica are affected by the global downturn.
In Guanacaste province where the real estate market has surged since 2006 the tide has turned. A number of highly publicized residential developments aimed at second-home owners and anchored by brand-name hotels and golf courses have been delayed on Guanacaste’s Gold Coast, a 60-mile stretch on the Pacific Ocean from the Papagayo Peninsula in the north to Tamarindo in the south.
Holiday home sales have been reduced to a ripple. Individuals who built or bought with an eye toward selling have lowered or postponed their expectations, trying instead to earn money by renting out their properties in a region that remains a popular tourist destination.
But according to Christopher Howard, an American author who specialises in real estate, for the serious or spontaneous buyer there are some good deals around especially in the $300,000 and lower market.
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"In a way the downturn benefits the Guanacaste market. Things were developing too fast and prices were getting too high," he said.
But well known developments have seen work stop. A $800 million luxury two hotel project with 300 residential units in Cacique backed by co-founder and former chairman of AOL, Stephen Case, has been delayed until the economic outlook improves.
Not far from Cacique, in Panama Beach, work had begun on La Punta Papagayo, a $300 million development, but it’s now delayed.
In Brazilito the Azulera Resort Village, a 557-acre community with a $300 million Hyatt Regency and 1,000 condominiums, town houses and single-family houses, work has halted.
Chris Simmons, owner of ReMax Ocean Surf Realty in Tamarindo, said vendors and developers are cutting their prices by about 20 to 30%. Looking ahead he is concerned that when interest returns to the market there will not be much to buy because there are virtually no new projects breaking ground.
Costa Rica still remains among the most popular second home destinations for Americans and it also has a thriving eco-tourism markets. Experts point out that the low cost of living and property taxes still attract retirees who are looking for cheaper options without too many compromises.
One alternative is to buy land. James Cahill, Managing Director of Costa Rica Invest, said that buying development land where teak is currently grown offers the investor good prime land with the advantage of having a commodity that is in demand. "The teak growing on your land will provide a good return but better than that as the world economy recovers and more baby boomers seek out their little piece of paradise the value of your land will increase rapidly giving you a spectacular return," he claimed.
This article has been reposted from Property Wire. View the article on Property Wire’s international real estate news website here.