Jump to content

CR in the eye of a property boom


Recommended Posts

The ICT, Costa Rican Tourism Board, said that more than $2 billion in projects were announced for Costa Rica in 2007 and many new endeavors are planned for 2008. Please review this article, which positions Costa Rica in the eye of a property boom. http://www.globalpropertyguide.com/Latin-America/Costa-Rica

 

The advent of affordable financing in CR has created an attractive housing market for the Latinos and foreigners as well. With Scotia Bank, HSBC and now Citi Bank purchasing Costa Rican financial institutions the competition will drive the local economy to its limit. The limit is difficult to envision because for many years the Costa Rican market did not offer mortgage financing and now with these major financial institutions all competing to lend money in little ole Costa Rica you will see tremendous growth in the housing sector.

 

Remember what it was like to get your first new car and borrow the money from the bank. I for one was honored to be accepted into the adult financial world. The Ticos are now being offered financing for cars, homes, etc at affordable rates. Therefore the average middle income Costa Rican is just getting a taste of how financing can improve ones lifestyle and create new opportunities.

 

The Costa Rican economy is like any other and is driven by financial investment and borrowing power. With these new international banks just now beginning to do lend money here the local economy is just getting started.

 

Additionally, North American real estate investors gravitate where the opportunities are attractive. Since the US real estate market is correcting and the opportunities are limited these investors will take their money and borrowing power to the markets that offer opportunities and appreciation.

 

Take a look at some of the new projects committed to and who are behind these megabuck investments.

 

REVOLUTION PLACES: Steve Case who founded AOL, is the chairman of the parent firm, Revolution Places, and Vice chairman is Philippe Bourguignon, former president of Club Med and president and CEO of Euro Disney. The president of the firm, is Donn Davis, who with Case helped build AOL. The company has Philippe Cousteau, grandson of the famous undersea explorer, as an environmental adviser. Although Case and his associates do not have extensive experience in real estate development in Costa Rica, the president of Revolution Places Costa Rica is Darren Linnartz, who worked for 15 years with Marriott/Ritz Carlton.

 

Revolution Places, just north of Playas del Coco, has been presented as an integrated luxury resort. The first phase, due to open in 2010, is on 263 hectares, about 650 acres. The estimated investment is $800 million, said the company. The project seeks to bring in One & Only Resorts, which will build 120 detached casitas. Also planned is an 18-hole golf course and a tennis center. Exclusive Reports was listed to build 30 residences. Miraval Cacique is contracted to build 60 villas and 120 luxury rooms.

 

The project is good for Costa Rica because it will provide jobs for 2,500 employees, will generate $20 million in taxes and the company promised to donate a million trees for a conservation group to plant nearby and $1 million for organizations that develop initiatives to protect the Costa Rican environment. Another major project, involving an estimated $600 million investment, was announced for Esparza earlier in 2007.

Link to comment
Share on other sites

Hi there. I was thinking that the meltdwon/reccesion in the US would bring prices down in CR, fewer buyers for second homes, etc. I'm just starting to think about buying something in the next year or so, gonna go look/see this year. Thinking Central Valley more for me (Escazu, Santa Ana, Atenas, etc). Prices seem pretty darn good but perhaps they will fall this year????

Edited by dona
Link to comment
Share on other sites

From my view, I believe that there are two distinct real estate markets in Costa Rica.

 

There is the Tico market and there is the Gringo market.

 

IMHO the Tico market is doing just fine for the reasons given above. However, what a Tico will spend their money on is quite different than what a gringo will buy. Very few if any will even think about spending $200,000 for a condo, which seems to be the entry point for the Gringo market.

 

With all due respect to our friend CRHomebuilder, I am not convinced that the Gringo market is doing as well as some want us to believe. I am not saying it is not, I am just saying that I am not convinced.

 

Personally, I find the info in CRHomeBuilder's post more useful than the information in the article sited. I feel pretty strongly that the properties in the coastal hot spots are way overpriced given the type of infrastructure in those areas. It really makes no sense to me. Just my personal opinion, I am no expert.

Link to comment
Share on other sites

I am a 30 year real estate broker from Florida & fully agree with a couple of these posts. After my first trip to Costa Rica for a little personal (real estate) fact finding, I saw condos that were priced HIGHER than the comparable units in the Tampa Bay area. With the free fall in prices here some distress sale properties are about the same price per square foot as CR properties. Personally, I hope it doesn't end up another "Florida in 40 years". My hope is that the infrastructure nevers catches up so that the current CR lifestyle will continue. However, I will admit, I am guilty of taking my driver to the Hooters in Escazu.

Link to comment
Share on other sites

Yep, and in 40 years Costa Rica will look just like Florida!!!

In some areas more like 10 years or less. But then again green construction is becoming more and more popular on the Nicoya Peninsula, so maybe this place will not end up like Jaco (*puke*) or Tamarindo.

Edited by TicoVille
Link to comment
Share on other sites

With all due respect to our friend CRHomebuilder, I am not convinced that the Gringo market is doing as well as some want us to believe. I am not saying it is not, I am just saying that I am not convinced.

I believe that in areas like Quepos, the market is absolutely dead. The hype has skyrocketed prices and nobody is willing to spend the money asked on a place that has lost its appeal. Other areas are still hot though, like the Nicoya Peninsula or now Peninsula de Osa.

 

The problem is that nobody who comes in late has the sense to envision what can be done in areas virtually untouched and with the same potential to become hot spots like some of the areas doing well now (example: Santa Teresa, Montezuma, Malpais).

 

I have been to Tamarindo and Quepos, Tamarindo was not the best spot, but still had something. Quepos was pretty sad to see. One thing the Malpais area has is a few rich and influencial Ticos who indeed have discovered the American way of thinking and will invest in something generating them top dollars or build something themselves that has universal quality.

Once again, here is what CNBC is saying for those who haven´s seen it yet:

 

Costa Rica, the hottest real estate market on planet earth

 

However, I will admit, I am guilty of taking my driver to the Hooters in Escazu.

I doubt that you had to twist his arm ;)

Edited by TicoVille
Link to comment
Share on other sites

I believe that in areas like Quepos, the market is absolutely dead. The hype has skyrocketed prices and nobody is willing to spend the money asked on a place that has lost its appeal. Other areas are still hot though, like the Nicoya Peninsula or now Peninsula de Osa.

 

 

I totally agree. I would throw Jaco in with that group. There is a glut of inventory coming onto the market.

 

The smaller markets are doing well because they are not WAY over priced, at least not yet. Hopefully these other markets will grow in a more sustainable fashion. Of the 3 hot spots, I think Quepos is in the best shape. Jaco and Tamarindo have been ruined. I sort of hope that those places do crash, so that the government will wake up and get it right.

 

I have spent a lot of time talking to both developers and environmentalist. The one thing EVERYONE agrees on is that Costa Rica needs better zoning laws. The developers need to know what rules they are playing under. All the after the fact litigation is bad for their businesses and a waste of resources that could be directed more productively elsewhere. Of course environmentalist decry the unrestrained and in many cases illegal development.

 

My understanding is that there are some interesting things being done in Cabuya (sp?) in terms of sustainable development. I know that you (Ticoville) are aware of the project by Eco International and Dream Properties in that area. My understanding is that there are many others that are trying to do the right thing. I hope that Costa Rica gets its act together in this regard. Costa Rica has an opportunity to be world leaders is sustainable development. Right now, the free for all approach has had devastating consequences in Jaco and Tamarindo, and a lesser extent in Quepos, my humble opinion.

 

That said, I am waiting on the sidelines. My guess it that in a year of two, condo will be available in Jaco for 30 cents on the dollar. I am not opposed to buying one when the prices are a little more realistic.

 

The thing I fear for the Costa Rica real estate market is that if there is a washout in Jaco, which I think is inevitable, that there will be a ripple effect through the entire market. I think this is something that ALL investors should be wary of.

 

That said, I think the central valley market is driven by an entirely different set of factors, those outlined at the top of this thread.

Edited by Kahuna
Link to comment
Share on other sites

I totally agree. I would throw Jaco in with that group. There is a glut of inventory coming onto the market.

 

The smaller markets are doing well because they are not WAY over priced, at least not yet. Hopefully these other markets will grow in a more sustainable fashion. Of the 3 hot spots, I think Quepos is in the best shape. Jaco and Tamarindo have been ruined. I sort of hope that those places do crash, so that the government will wake up and get it right.

 

I have spent a lot of time talking to both developers and environmentalist. The one thing EVERYONE agrees on is that Costa Rica needs better zoning laws. The developers need to know what rules they are playing under. All the after the fact litigation is bad for their businesses and a waste of resources that could be directed more productively elsewhere. Of course environmentalist decry the unrestrained and in many cases illegal development.

 

My understanding is that there are some interesting things being done in Cabuya (sp?) in terms of sustainable development. I know that you (Ticoville) are aware of the project by Eco International and Dream Properties in that area. My understanding is that there are many others that are trying to do the right thing. I hope that Costa Rica gets its act together in this regard. Costa Rica has an opportunity to be world leaders is sustainable development. Right now, the free for all approach has had devastating consequences in Jaco and Tamarindo, and a lesser extent in Quepos, my humble opinion.

 

That said, I am waiting on the sidelines. My guess it that in a year of two, condo will be available in Jaco for 30 cents on the dollar. I am not opposed to buying one when the prices are a little more realistic.

 

The thing I fear for the Costa Rica real estate market is that if there is a washout in Jaco, which I think is inevitable, that there will be a ripple effect through the entire market. I think this is something that ALL investors should be wary of.

 

That said, I think the central valley market is driven by an entirely different set of factors, those outlined at the top of this thread.

I'm hearing through the gringo grapevine that at the present time, due to the high cost of concrete etc. that it's going to cost $400,000 to build a house! Right now, near me, is a house for sale for $300,000 (I wouldn't give more than $75,000 for it)!

I know a little housing develop'ment htat I can drive to in lessw than 5 minutes, where a Tico can buy a lot, and put up a house for less than $25,000!! People in my are have vacant lots, and are asking hundreds of thousands of dollars for them! Where in the hell are they coming up with these prices?? I don't see any of this selling! Just goes to show that everyone has their own "scam", and there are absolutely no shortage of "SUCKERS"!!!

Link to comment
Share on other sites

I'm hearing through the gringo grapevine that at the present time, due to the high cost of concrete etc. that it's going to cost $400,000 to build a house!

 

I don't see any of this selling! Just goes to show that everyone has their own "scam", and there are absolutely no shortage of "SUCKERS"!!!

 

 

They have to have some reason to have a $400,000 price tag on a house. That sounds like as good a reason as any. I can guarantee you that Ticos aren't paying $400,0000. HA HA, concrete must be less expensive where they buy it.

 

:lol:

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.