Real Estate - Costa Rica

Costa Rica

The Real Estate market market in Costa Rica is expected to reach a value of US$350.30bn by 2024.
Among the different segments, Residential Real Estate dominates with a projected market volume of US$276.30bn in 2024.
This segment is anticipated to show an annual growth rate of 3.33% (CAGR 2024-2029), resulting in a market volume of US$412.70bn by 2029.
In global comparison, United States is expected to generate the highest value in the Real Estate market market, reaching US$132.0tn in 2024.
Costa Rica's real estate market is experiencing a surge in demand from foreign investors seeking sustainable and eco-friendly properties amidst the country's commitment to environmental conservation.

Key regions: United States, China, Japan, Germany, United Kingdom

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Analyst Opinion

The Real Estate market in Costa Rica is experiencing significant growth and development in recent years.

Customer preferences: Costa Rica is known for its natural beauty, with stunning beaches, lush rainforests, and diverse wildlife. This has attracted a large number of international buyers looking for vacation homes or investment properties. Additionally, Costa Rica offers a high quality of life, with a stable political environment and excellent healthcare system. These factors have made the country an attractive destination for retirees and expatriates seeking a relaxed and peaceful lifestyle.

Trends in the market: One of the key trends in the Costa Rican real estate market is the increasing demand for eco-friendly and sustainable properties. Buyers are increasingly looking for homes that are built with environmentally friendly materials and incorporate renewable energy sources. This trend is driven by a growing awareness of the importance of preserving the natural environment and a desire to reduce carbon footprints. Additionally, there is a growing trend towards luxury properties, with high-end amenities and modern designs.

Local special circumstances: Costa Rica has a strong tourism industry, which has a positive impact on the real estate market. The country attracts millions of tourists each year, many of whom fall in love with the natural beauty and decide to invest in property. This has created a strong demand for vacation rentals, particularly in popular tourist destinations such as Guanacaste and the Nicoya Peninsula. The government has also implemented policies to attract foreign investment, such as offering tax incentives for real estate development projects.

Underlying macroeconomic factors: Costa Rica has a stable and growing economy, which has contributed to the growth of the real estate market. The country has experienced steady economic growth in recent years, driven by sectors such as tourism, agriculture, and technology. This has led to an increase in disposable income and purchasing power, making it easier for individuals to invest in real estate. Additionally, low interest rates and favorable mortgage conditions have made it more affordable for buyers to finance their purchases. In conclusion, the Real Estate market in Costa Rica is thriving due to customer preferences for natural beauty, a high quality of life, and eco-friendly properties. The market is also driven by the growing tourism industry and favorable macroeconomic factors such as stable economic growth and low interest rates. These trends and circumstances are expected to continue driving the growth of the real estate market in Costa Rica in the coming years.

Methodology

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.