Over the past ten years, thousands have invested in the Costa Rican beachfront real estate market along the upper Pacific coast, primarily around and north of Quepos. Many others have invested in less expensive oceanfront real estate overlooking the Pacific, farms, and riverfront properties inland, but mostly near the ocean. Many others have purchased vacation homes, second homes, and retirement properties in Costa Rica due to the low cost of living compared to the United States and Europe.
Both the investor and casual real estate buyers have already made, or expect to make, huge returns on their investments when they sell their real estate along the coast. In today’s market, it appears that many homeowners could earn around 500% of their beachfront investments over a five-year period.
Many in the Jaco, Quepos, Puntarenas, Tamarindo, and Flamingo areas will benefit considerably more, but the market in the northern region is rapidly exceeding “affordable price levels.” Much of the beachfront real estate in these areas is being “gobbled up” by large corporate firms to build gated subdivisions, condominiums, mega-hotels, and resorts for vacationing sun-loving Americans and Europeans. This corporate rush for prime beachfront land is essentially putting it out of reach for the average investor or retiree.
The new airport near Liberia has resulted in a sharp escalation in property prices in the coastal towns surrounding Liberia. In addition, the southern region of Liberia has experienced price increases close to 100% in the last two years and the Costa Rican government projects that real estate prices near Marbella will double in the next three to five years. A beachfront ACCESS lot in this area is currently for sale for around $300,000 for 54,000 square feet or 1.2 acres.
Dominical, just south of Quepos, is currently experiencing a huge price boom as beachfront condos are springing up like palm trees, and of course, prices are rising at an astonishing rate. Personally, I passed up a $150,000 lot along a cliff near Dominical seven years ago. On a recent trip to San Jose, I saw a cliffside lot in the same area advertised for $450,000, a 300 percent return on an investment held for seven years. You can now expect to pay $350,000 for a lot near Dominical.
The same can be said of Palo Seco. In 2000, I looked at a huge lot there for $70,000. Today, the lots in Palo Seco are being converted into condominiums. According to a real estate agent in the area, property in Palo Seco has increased by 400% in the last two years and this does not include the escalation in the previous five years. The 11,000 square foot building lots sell for around $115,000.
With the approval of a new marina in Golfito, property prices should skyrocket. There is a lot of potential to make a lot of money in Golfito real estate right now, but there is no beach or infrastructure development that most Americans or Europeans expect when investing in “city” property. Before Golfito really takes off, someone will have to foot the bill for these improvements, and you shouldn’t expect local taxes to foot the bill.
In the last seven years, the small town of Zancudo and Zancudo Beach have shown tremendous growth in real estate sales and land prices, but Playa Zancudo real estate remains affordable for most investors, retirees and those looking for a second home or vacation home. As I said, many of the beachfront properties in Costa Rica have gone up in price by 300-400% (or more) in the last six or seven years and Zancudo’s investments have performed at the same level. However, large “unimproved” beachfront lots in Playa Zancudo only sold for around $35,000 each in 2000, some for less. Today, those same very large lots, with no improvements, sell for around $150,000 each; these are NOT small building lots, but large tracts of vacant real estate. Compare these prices to beachfront or riverfront properties to the north and you’ll see why Playa Zancudo and the surrounding area is one of the last frontiers for affordable real estate investment on Costa Rica’s Pacific coast.
Prices here will probably be comparable to what we’re seeing on the upper coast in another three to five years, possibly sooner once the new airport north of Golfito is completed. This means that today’s investors could reap substantial gains in the coming years, if the past history of real estate prices in Costa Rica continues.
When opportunity knocks, will you open the door?
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Copyright 2007 By Donald Lee Johnson
