Source (http://www.thebeachtimes.com/) By Leland Baxter-Neal
Central Bank Points To First Quarter in Puntarenas and GuanacasteForeign investment in Costa Rica’s real estate industry has nearly tripled in the past 12 months, according to Costa Rica’s Central Bank. By the bank’s estimate, mostly US investors and homebuyers bought at least $192 million worth of property in the first three months of this year, largely in the provinces of Guanacaste and Puntarenas. That compares to $70 million during the same period in 2006. The estimate excludes purchases of hotels, tourism businesses and deals worth less than $100,000, and is recognized to be likely short of the real figure. “Certainly, as the recent Central Bank study shows, an important factor in the increment of foreign investment in the last months has been real estate development and property acquisition by foreigners,” said the Minister of the Presidency, Rodrigo Arias. “Much of this development is related to the tourism industry, precisely one of the engines of the country’s economy.” In fact, real estate prices up and down the Pacific coast have risen over the last year, as Guanacaste’s market matures and the central Pacific looks to be entering its own boom. Real Estate agents up and down the coast told The beach Times this week the bank’s figures measure up to what they’re seeing in their areas, where business continues to be good with both price and demand rising. Development is also becoming more high-end, they concurred, with more sophisticated and environmentally conscious developers and buyers following the path beaten years earlier by The Four Seasons Hotel, on the Papagayo Peninsula. In the Central Pacific sales are booming, as condominium projects go up rapidly along the coast. Many investors are looking further toward the horizon, however, in expectation of high-end, name-brand projects like those that have drawn so much press further north. In Guanacaste, the high-volume land purchasing of past years has given way to concentrated development, as much of the valuable beachfront and ocean view property has been bought up and many of the projects that were sold under pre-construction deals are now under way. “We personally aren’t slow, but I know that the trend has slowed down an awful lot,” said Penelope Lent, of Lent Eckhart Properties, from her office in Flamingo this week. “The big parcels purchased in 2005 and 2006 are now going vertical,” she said. “There are all kinds of things in the pipeline, but they’re not available at this moment, and might not be available for another year.” Bob Davey, of Century 21 in Flamingo, however, described business as brisk.
© Zoraida Diaz
GRIEF-STRICKEN: The body of 19-year-old construction worker David Rocha Gonzalez lays on Penca Beach in Guanacaste. The man was struck by lightning during a short-lived but fierce electrical storm on Sunday. “Last year was the biggest sales volume year we’ve had, and our company has grown every year. So far, through June, we are way ahead of the pace of ‘06, and the end of the year looks strong,” Mr Davey said. “And it’s large, sophisticated investors, private and institutional, that we’re working with. “President Oscar Arias has really kicked into gear to follow up on his promises to improve infrastructure, and that’s really helped turn around the negative publicity we had over the last two years,” Mr Davey added. According to Les Nunez, of First Realty, in Guanacaste’s Playa Hermosa, land prices have “gone double, to double-and-a-half.” “Ocean views are $500 per square meter and up, easily,” Mr Nunez said. “There’s been reports in Tamarindo of $1,000 per meter.” Single family homes range from $600,000 to $1.5 million, and are being sold for about double what they got last year, he added, while raw land has, in some cases, “gone triple." Mr Nunez chalks up the jump in prices to the arrival of major name brand projects in the region, such as the Westin Hotels and Resorts and the Mandarin-Oriental. Some 20 high-end hotels are currently being planned or built for Guanacaste’s northern coast, which would add hundreds of rooms to the area’s offerings and represent hundreds of millions of dollars in investment. Mario Solano, an economist with the Central Bank who worked on the property investment estimate, said that, though tourism investment figures for 2007 are not yet available, it nearly tripled between 2005 and 2006. He expects this year’s growth to be “a little more than that,” which is a factor pushing real estate investment. “We see a relationship between the two. The Hyatt comes out promoting people to come stay at its hotel, and a lot of people are going to be interested in buying property in that area." That is precisely what has real estate agents in the Central Pacific, particularly around Jacó, excited. Last year, Starwood Hotels & Resorts Worldwide announced they would be building a St Regis Resort with residential elements in the central Pacific with Costa Rican development firm Genesis. In addition to 133 luxury hotel rooms, the project includes “49 condominium-hotel residences,” 42 “whole-ownership condos” and nine estate homes. In Esterillos, just south of Jacó, two golf courses and attached residential communities – Cabo Caletas and Del Pacífico – are under construction. In Jacó, an estimated 2000 condos are at different stages of development, from un-permitted plans to near-completion. “What’s happened is the central Pacific has really now started to move in a forward direction, with growth and bigger name projects with branding,” said Scott Williams, a real estate agent with 2 Costa Rica Realty. “Those things were before exclusively Guanacaste.”
© Files Beach Times
STRATEGY ON TRACK: Minister of the Presidency Rodrigo Arias says the government strategy to attract foreign investment that will create jobs is still among President Arias’ priorities. Prices remain lower than in Guanacaste on the average, but have still increased dramatically, sometimes double, over the last year. Tim Kopatich, with Crystal Clear Realty, said that 1800-square-foot homes that his company is selling in Bejuco, south of Esterillos, have gone from $135,000 last year to $275,000 today. In general, however, he says prices in and around Jacó have increased about 35 to 40 percent over the last year. Jeff Fisher, of CR Beach Investment Real Estate, says prices in Jacó, Herradura and Playa Hermosa are up, and sometimes way up. “I worry when two-bedroom beachfront condos sell for more than $500,000, because the infrastructure hasn’t caught up with this new pattern of prices,” Mr Fisher said. “A year ago a two-bedroom beach front house was $375,000. It was cute that Jacó didn’t have any traffic lights or bike paths and had very few police. Now that prices have risen dramatically, its important that the new mayor and the chamber of commerce work quickly to demonstrate that changes are being made, as minor as putting a traffic light.” Mr Fisher added that, despite some extremes, the bulk of his condo sales are still around $250,000 to $350,000, and that condo prices in general have risen by about 25 per cent over the last year, while raw beachfront land has risen slightly more. “They’re asking $1000 to $1400 per square meter, while a year ago they were asking $600 to $1000,” he said. Most dramatic, however, has been the increase in rent for commercial space along Jacó’s main boulevard, Avenida Pastor Díaz, Mr Fisher said, where rent has gone from $300 per square meter to $1000. Mr Fisher said his buyers “are overwhelmingly buying condos, but a lot of my sales are also gated-community, single-family homes five blocks from the beach for $215,000. “Ninety per cent of the people are buying for investment purposes or for rental income. Ten per cent are telling me they want to move there,” Mr Fisher said. Further south, near Manuel Antonio, property values have risen less dramatically, according 2 Costa Rica Realty’s Williams. He estimates prices have increased about 15 to 20 per cent across the board. While raw beachfront land is now impossible to come by, 1000 to 1500-square-meter ocean view lots can be found for $250,000 to $350,000, he said.
Posted by Roger Vlasos
Broker/Owner
Century21 At the Beach
Playas del Coco, Guanacaste
Website: www.century21incostarica.com
Website: www.northpacificproperties.com
Email: roger@century21incostarica.com
