Over the past ten years, thousands have invested in Costa Rica’s 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 seems that many homeowners could make a return of around 500% on beachfront investments made over a five-year period.
Many in the Jaco, Quepos, Puntarenas, Tamarindo and Flamingo areas stand to benefit considerably more, but the market in the northern region is rapidly outgrowing “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 sun-loving, vacationing 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 spike in property prices in the coastal towns surrounding Liberia. In addition, the region south of Liberia has seen 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. An ACCESS beachfront lot in this area is currently listed for about $300,000 for 54,000 square feet or 1.2 acres.
Dominical, south of Quepos, is currently experiencing a huge price boom as beachfront condos are springing up like palm trees, and of course prices are increasing at an astonishing rate. I personally passed up a $150,000 cliffside lot 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. Now you can expect to pay $350,000 for a lot near Dominical.
The same can be said for Palo Seco. In 2000, I looked at a huge lot there for $70,000. Today, Palo Seco lots are being converted to 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 increase 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 great potential to make big bucks in Golfito real estate right now, but there is no beach or infrastructure development that most Americans or Europeans expect when investing in “city” properties. Before Golfito really gets off the ground, someone will have to foot the bill for these improvements, and you shouldn’t expect local taxes to foot the bill.
Over the past 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 risen 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, the large “unimproved” beachfront lots in Playa Zancudo only sold for about $35,000 each in 2000, some for less. Today those same very large lots, with no improvements, sell for about $150,000 each; these are NOT small building lots, but large tracts of vacant real estate. Compare these prices with 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 likely be comparable to what we are 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 investors today could make substantial profits in the years to come, if the past history of real estate prices in Costa Rica continues.
When opportunity knocks, will you open the door?
Contact Us
Copyright 2007 By Donald Lee Johnson
