According to a mid-year report by commercial real estate firm NAI Costa Rica, Costa Rica’s real estate markets for housing, offices, retail space and land have all shown signs of improvement through the first half of 2010.
The report, which monitors monthly activity in residential, commercial, construction and investment markets, found that the Costa Rican real estate market is “recuperating well” after the recession year of 2009, which saw the market slow considerably.
“The Costa Rican market has suffered the last two years, including an almost complete paralysis of big projects outside of the Central Valley, in the area of Guanacaste and other coastal areas,” Carlos Robles, business director of NAI Costa Rica, told The Tico Times. “At the end of last year and the beginning of this year we started to see a slow recovery that is projected to continue in the remaining months of this year. The majority of markets are starting to look more and more positive.”
Robles said real estate has picked up in large part because national banks are reopening credit lines that were closed in 2009. By unlocking credit, new developments were able to acquire necessary financing and stalled developments were completed.
The report also indicated that the industrial market is experiencing a strong recovery, evidenced by the over 95 percent occupancy rates in warehouses, and free-trade zones. Office space is showing a 90 percent occupancy rate, and a demand for retail property is high, as evidenced by the 60,000 square meter expansion of the Multiplaza Escazú shopping mall, the leasing of 6,000 square meters of office space at Avenida Escazú and the construction of the “Momentum” complex on the east side of San José.
While most real estate indicators are positive, Robles said several incomplete developments remain in the Guanacaste and central Pacific regions and that national real estate prices continue to be too high. Robles said that further growth in the Costa Rican real estate market would most likely have to wait for the lowering property and housing prices to meet the expectations of national and international buyers.
“There is a lack of buyers looking for a second home, particularly in the U.S. market, which is one of Costa Rica’s largest markets,” Robles said. “Their wallets are much thinner than they were a few years ago. To entice new buyers, prices need to be adjusted to more affordable levels.”
For more on the 2010 Costa Rican real estate market, see the Sept. 10 print or digital edition of The Tico Times.