2023, By the Numbers: What’s Happening in the Costa Rican Real Estate Market?

Main Costa Rica real estate market insights

There are different kinds of people in this world. I’m a numbers kind. I guess it goes with the territory. And so, every quarter and every year, I find myself reviewing, crunching, and interpreting the numbers. They help me get a handle on today’s Costa Rican real estate market and evaluate current and near-future trends.

The numbers also help me see where my brokerage, Blue Water Properties of Costa Rica, stands currently and where we’re going. They allow me to gauge whether we’re meeting our goals and benchmarks. 

As I said, I’m a numbers person. But I’m also a big-picture person. I love to extrapolate the data and predict what it can tell us not just about yesterday and today, but tomorrow, too.

And given that it’s November, we have quite a bit of data compiled for 2023. So, I thought I’d share. 

2023, by the Numbers

2023 real estate by the Numbers

I’m happy to say that Q1, Q2, and Q3 have been very strong for Blue Water Properties. If we are able to keep this pace through the end of the year, we’d outpace even our record 2022 year, at $103,000,000 sold. And these numbers don’t even touch on the high season…

Of course, the numbers tell a much bigger story than ours at Blue Water Properties. They have a whole lot to say about the Costa Rican real estate market:

Rising Interest Rates Affecting Lower- to Mid-Priced Property

Rising Interest Rates Costa Rica

Though Costa Rica’s real estate market has traditionally relied more on cash buyers, rather than real estate loans, that has changed over the last decade. It was no surprise, then, to observe the correlation between rising interest rates and property purchases

As in the United States and many other countries, a jump in the world’s interest rates has affected our local market, too. We know what this means from a global standpoint: Thirty-year mortgage rates are the highest they’ve been in decades. First-time buyers are having trouble breaking into the market. And, because many people don’t want to take out a new mortgage at newly higher rates, real estate inventory is low. 

The Costa Rican real estate market has also been affected. In addition to the effects reflected globally, higher interest rates have curbed buyers’ ability to purchase a second home. That’s a major market here in Guanacaste: Both Costa Ricans and foreign buyers who are buying a beach home – a second home or a vacation home, but often not a primary home. 

As a result, we’ve seen a decrease in lower- and mid-priced real estate sales, as these buyers are more likely to avail themselves of mortgage loans, home equity loans, and other financing to purchase a Costa Rican home. Still, we saw only a slight slow-down, rather than a total bottoming out, as the world has seen before. 

Rising High-End Property Sales

Rising High-End Property Sales

What I’ve found most fascinating? The total numbers are strong because we’re seeing a notable uptick in high-end sales – namely, properties in the $1+ million price range.

In other words, there are fewer overall transactions but total sales numbers are high because the ultra-wealthy – the market for high-end Costa Rican real estate – are cash buyers (and therefore, not beholden to interest rates). And they are buying. By way of anecdotal evidence, at Blue Water Properties of Costa Rica, we even broke a brokerage record in September 2023, when one of our agents closed on a $6.35M home at Senderos.

New Construction Supplies Demand

We’ve also observed a lot of new construction in the area, which answers the demand for the market segment looking for a brand-new house. (And it’s a significant market.) 

Further affecting the supply side of the equation, some areas of Guanacaste are still troubleshooting their water issues, so available supply is limited while demand remains strong

That has helped fuel these sales, as developer-led new construction, and especially new construction at gated communities, has already handled water permissions, electric hookups, and many of the other hurdles to building a home in paradise. Add in the ability to customize a home’s finishes, and many buyers see this as a best-of-both-worlds scenario: Skip the obstacles without sacrificing the custom home you’ve dreamed. 

Luxury Projects, Gated Communities, and Branded Properties on the Rise

Luxury Projects, Gated Communities, and Branded Properties on the Rise

Another fascinating observation is that 2023 has seen an increase in gated developments, luxury single-family and condominium projects, and branded projects (ex. the Waldorf-Astoria residential project). 

For example, if we look at the Papagayo Peninsula alone, we can see both the popularity of these projects, as well as how they simultaneously reflect other trends (new construction, high-end $1+ million real estate, etc.):

  • El Mangroove Autograph Collection® Residences: Situated at Playa Panama, these residences stand as a testament to one of Costa Rica’s most elite resort communities. Meticulously crafted and environmentally conscious, they embody the visionary work of Ronald Zurcher, an esteemed Costa Rican architect.
  • Andaz Costa Rica Residences: With completion slated for 2023, this community presents a cutting-edge ensemble of turnkey condominium residences. The homes not only promise curated experiences and amenities but also bear the distinctive hallmark of the Andaz touch, all under the adept management of Hyatt.
  • Nekajui, a Ritz-Carlton Residence: Dedicated to the pinnacle of luxury living, Nekajui introduces a limited collection of branded villas and estate homes. Exuding extraordinary beauty and offering handcrafted homes with unparalleled luxuries. Only a few residences remain available, starting at under $6 million.
  • The Enclaves at Nacasolo Bay: Envisioned by the renowned Costa Rican architect Ronald Zürcher, the community comprises an exclusive set of 10 contemporary oceanfront homes. This collection celebrates the allure of outdoor living, the splendors of the Pacific, and the elegance of tropical modern design, with prices starting under $7 million.
  • Bahías by Antoine Predock: An enclave of sheer exclusivity, the collection features a mere 13 private family compounds suspended over two bays. Anticipated to open in early 2024, Bahías offers architectural marvels that redefine luxury living.

… And that’s just the beginning. The Waldorf-Astoria’s luxury branded residences sold out during pre-sale, almost as soon as they became available. Zapotal Costa Rica by Discovery Land is coming soon. And so on, and so on. 

These high-end, often branded projects are an excellent example of how developers have responded to the market’s demand. And, as I review the numbers, reflect on current trends, and look to 2024, 2025, and even 2026 completion dates for future announced projects, the market looks strong. 

High Season is Coming

Costa Rica real estate High Season is Coming

Typically, Costa Rica’s real estate “high season” kicks into high gear in late November – just after U.S. Thanksgiving, as Costa Rica transitions into the most gorgeous weather of the year while northern countries transition into seasonal chill. 

From a real estate perspective, we typically see an increase in sales around this time. By January, when Costa Rican summer (dry season) is in full swing and the winter doldrums have hit the U.S., Canada, and Europe, the Costa Rican real estate market has roared back to some of the best numbers of the year ­– but that’s for us to look at in 2024!

It’s hard to say with certainty what Q4 (and 2023, generally) will bring, but my experience says that as we head into high season, demand, showings, and sales will only increase. And that means that December 2023, and Q4 generally, could be the best of the year. One thing I do know: It’s shaping up to be another record-breaking year!

Looking for More Insight into the Costa Rican Real Estate Market?

Looking for More Insight into the Costa Rican Real Estate Market

Whether you’re a buyer/seller, an investor, or a developer, you’re on the right track and in the right place. Researching the market and understanding your prospects is an essential aspect of the decision-making process.

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