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Residential Real Estate Leases - Costa Rica

Costa Rica

In Costa Rica, the Residential Real Estate Leases market market is anticipated to witness significant growth.
By 2024, the revenue of this market is projected to reach a staggering US$5.10bn.
House Leases, in particular, dominate this market segment, with a projected market volume of US$3.60bn in 2024.
Looking ahead, the revenue is expected to exhibit a noteworthy annual growth rate (CAGR 2024-2029) of 4.87%, leading to a market volume of US$6.47bn by 2029.
The demand for residential real estate leases in Costa Rica has been steadily increasing due to the country's attractive climate and affordable housing options.

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

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Analyst Opinion

The Residential Real Estate Leases market in Costa Rica has been experiencing significant growth in recent years.

Customer preferences: One of the main factors driving this growth is the increasing demand for rental properties in the country. Many individuals and families are choosing to rent rather than buy properties, due to factors such as financial flexibility, lifestyle preferences, and the ability to avoid the responsibilities of property ownership.

Trends in the market: There are several trends that are contributing to the growth of the residential real estate leases market in Costa Rica. Firstly, the country has seen a rise in tourism, with more visitors choosing to stay in rental properties rather than hotels. This has led to an increase in demand for short-term rental properties, particularly in popular tourist destinations. Additionally, there has been a surge in expatriates and retirees choosing to live in Costa Rica. These individuals often prefer to rent rather than buy a property, as it allows them to test out the local lifestyle before committing to a long-term investment. This trend has led to a growing demand for long-term rental properties in popular expat communities.

Local special circumstances: Costa Rica has several unique factors that contribute to the growth of the residential real estate leases market. Firstly, the country has a stable political and economic environment, which makes it an attractive destination for both tourists and expatriates. Additionally, the government has implemented policies to encourage foreign investment, including offering tax incentives and simplifying the process of purchasing property. Furthermore, Costa Rica has a strong rental market infrastructure, with many real estate agencies and property management companies catering to the needs of both landlords and tenants. This makes it easier for individuals to rent out their properties and for tenants to find suitable rental accommodations.

Underlying macroeconomic factors: Several macroeconomic factors have also contributed to the growth of the residential real estate leases market in Costa Rica. The country has experienced steady economic growth in recent years, which has led to an increase in disposable income and the ability for individuals to afford rental properties. Additionally, low interest rates have made it more affordable for investors to purchase properties for rental purposes. This has led to an increase in the supply of rental properties, which has helped to meet the growing demand. In conclusion, the Residential Real Estate Leases market in Costa Rica is experiencing significant growth due to increasing customer preferences for rental properties, trends such as the rise in tourism and expatriates, local special circumstances such as a stable political and economic environment and a strong rental market infrastructure, and underlying macroeconomic factors such as economic growth and low interest rates.

Methodology

Data coverage:

Figures are based on total and average revenue of residential apartment leases.

Modeling approach:

Market size is determined by a bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, 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:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war considered at a country-specific level.