How is the property market forecast in Costa Rica?

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A team specialized in real estate investing in LATAM countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Costa Rica. If you'd like to learn more about us, you can check our presentation page.

What's the current average property price in Costa Rica and how has it changed recently?

As of September 2025, Costa Rica's national average property price stands at approximately $1,021 per square meter, which translates to about $95 per square foot.

Single-family homes currently average between $533,647 and $808,442, depending on the region and property specifications. This represents a significant correction from the peak prices seen in early 2024, when many coastal and luxury markets experienced a 30-41% price drop.

Condominiums typically command higher prices per square meter, ranging from $1,100 to $1,724 per square meter, especially in urban centers and popular expat destinations. Luxury properties often exceed $1.3 million, with high-end averages in Guanacaste now at $967,506, down 36% from previous peaks.

The price correction has been most pronounced in coastal luxury markets, while urban areas like San José have maintained more stability. San José apartments, for instance, still show positive growth of 12% year-over-year in 2024, with prices averaging $2,343 per square meter.

This market reset has created opportunities for buyers, as many previously overpriced properties are now more reasonably valued while maintaining strong fundamentals for future appreciation.

How do short-term, medium-term, and long-term market forecasts compare?

The Costa Rican property market shows different growth trajectories across various time horizons, with the most optimistic projections in the short term due to the recent market correction.

Short-term forecasts for the next 6-12 months predict a stabilization and moderate rebound, with projected appreciation of 5-12% annually. This recovery is expected to be most pronounced in previously bottomed-out luxury and beachfront markets, particularly in the Caribbean coast, Southern Zone, and eco-tourism corridors.

Medium-term projections for 1-3 years are more conservative, forecasting 3-8% annual growth. Key infrastructure projects including new roads and airport improvements are expected to boost accessibility and prices in previously undervalued areas during this period.

Long-term forecasts for 3-10 years suggest a compound annual growth rate of 4-6% for the overall market. However, select locations focused on digital nomad amenities, eco-sustainable developments, and undervalued small towns could potentially see 15-20% gains in the right circumstances.

The varying growth rates reflect the market's current transitional phase, where short-term rebounds from correction lows are expected to moderate into more sustainable long-term appreciation patterns.

Which regions are expected to see the fastest price growth?

Different Costa Rican regions are positioned for varying levels of growth depending on the timeframe, with coastal and eco-tourism areas leading the recovery.

In the short term, the Southern Pacific region including Dominical and Uvita is expected to see the fastest growth, along with the Caribbean coast and established eco-hotspots. These areas have shown resilience during the market correction and are attracting renewed international interest.

For medium-term growth, Central Valley urban satellite towns are positioned well, along with infrastructure-corridor zones and select beach towns that are further from the main tourist hubs but benefit from improved connectivity. These areas offer better value propositions while maintaining growth potential.

Long-term growth leaders are expected to be areas benefiting from sustained expat influx, good connectivity, and sustainable development practices. The Southern Zone, uncrowded coastal areas, and previously overlooked provinces with improving infrastructure are likely to see the strongest appreciation over the decade.

It's something we develop in our Costa Rica property pack.

Regional variations are significant, with some coastal hotspots like Tamarindo and Santa Teresa continuing to command premium prices of $2,725-$3,300 per square meter, while emerging areas offer entry points at much lower cost bases with higher growth potential.

How do property prices break down by different types?

What are current rental yields and how are they expected to change?

Costa Rica's rental yields vary significantly by location and property type, with urban properties generally offering the highest returns on investment.

San José and other urban centers currently provide the strongest rental yields at 7.5-8.6%, with the capital city offering the highest returns due to consistent local demand and business activity. Central Valley satellite towns like Escazú and Santa Ana generate yields of 7-8%, benefiting from their proximity to San José while offering more space and amenities.

Beach towns such as Tamarindo and Jacó typically produce yields of 5-7%, reflecting their higher property purchase prices but strong vacation rental demand. The Southern and Caribbean coasts can achieve yields of 5-10% for vacation rentals, with well-managed Airbnb properties sometimes exceeding this range during peak tourist seasons.

Rental yield forecasts suggest stability or mild increases in the short term, particularly for non-luxury inventory and eco-sustainable properties where demand remains robust. The vacation rental market is expected to benefit from continued growth in eco-tourism and digital nomad trends.

Properties in emerging areas with improving infrastructure may see yield improvements as accessibility increases and new amenities attract more renters. However, luxury coastal properties may experience yield compression as purchase prices recover from their recent correction.

How is foreign versus local buyer demand trending?

Foreign investment continues to dominate Costa Rica's coastal and tourism-focused real estate markets, though recent price corrections have allowed more local and aspirational buyers to re-enter certain market segments.

International demand remains particularly strong in prime coastal zones, luxury developments, and eco-tourism areas, driven by North American and European buyers seeking vacation homes, investment properties, or retirement destinations. The recent price corrections have actually attracted more foreign buyers who view current pricing as an opportunity.

Policy incentives including Law 9996 and new digital nomad visa programs continue to increase foreign demand, particularly from remote workers and entrepreneurs seeking to establish residency in Costa Rica. These programs have created sustained interest from younger, tech-savvy international buyers.

Local demand remains steady but is generally dwarfed by international interest in prime coastal zones. However, urban and more affordable markets see stronger participation from Costa Rican buyers, particularly in the Central Valley and emerging suburban areas.

The balance between foreign and local demand varies significantly by region, with coastal areas seeing 70-80% foreign buyer activity, while urban centers maintain a more balanced mix of local and international purchasers.

What are the main economic factors likely to influence the market?

Several key economic and policy factors are expected to shape Costa Rica's property market over the next few years, with most trends supporting continued growth.

Tourism growth and the expanding "work from anywhere" digital nomad movement represent primary market drivers, as Costa Rica continues to attract remote workers and location-independent professionals seeking high quality of life and reliable infrastructure.

New infrastructure developments including road improvements, airport expansions, and broadband connectivity enhancements are opening previously inaccessible areas to development and investment. These projects are particularly impacting the Caribbean coast and interior regions.

Costa Rica's economic growth, with GDP expanding 3.5-4% annually, provides a stable foundation for property market appreciation. Currency appreciation against major international currencies also makes Costa Rican real estate more attractive to foreign investors.

Environmental and sustainability regulations favor high-quality, eco-friendly developments, which aligns with international buyer preferences and commands premium pricing. These regulations also limit supply in some areas, supporting price stability.

Government incentives for foreign investment and residency programs continue to attract international capital, while banking sector improvements make financing more accessible for qualified buyers.

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Which areas are considered undervalued with the best appreciation potential?

Several Costa Rican regions currently offer compelling value propositions with strong appreciation potential, particularly areas that have been overlooked during the recent tourism and development boom.

The Caribbean coast, particularly Limon province, represents one of the most undervalued opportunities with new infrastructure investments and growing eco-tourism interest driving future potential. This region has historically been less developed but offers authentic Caribbean culture and pristine natural environments.

Parts of the Southern Pacific region, including areas around Ojochal and Golfito, remain early in their growth cycle despite increasing international recognition. These locations offer excellent value for buyers seeking beachfront or near-beach properties with significant upside potential.

Inland and rural towns positioned for spillover growth from major tourist areas present opportunities, particularly those benefiting from improved digital connectivity and road access. These areas often provide authentic Costa Rican experiences at fraction of coastal prices.

Secondary markets in the Central Valley, including developing suburbs and satellite towns, offer appreciation potential driven by urban growth and infrastructure improvements while maintaining affordability for both local and international buyers.

It's something we develop in our Costa Rica property pack.

What budget ranges work best for different investment goals?

Investment budget requirements in Costa Rica vary significantly based on target returns and investment strategy, with clear ranges emerging for different objectives.

For investors targeting high rental returns, budgets of $150,000-$400,000 work well for city apartments and condos, while $250,000-$550,000 suits vacation rentals in strong beach towns. These price points typically generate yields of 6-8% while maintaining good liquidity.

Long-term capital growth strategies work best with budgets of $250,000-$700,000 focused on up-and-coming eco-tourism nodes and sustainable developments. This range allows access to houses or turnkey small developments in areas positioned for significant appreciation.

Luxury and vacation segment investments requiring $800,000-$2 million provide access to prime appreciation potential in established international hotspots, though yields may be lower while capital growth potential remains strong.

Entry-level investors with budgets under $150,000 can find opportunities in emerging inland areas or smaller condos in developing markets, though due diligence becomes more critical at these price points.

Mixed-use and commercial property investments typically require budgets exceeding $500,000 but can provide diversified income streams and stronger appreciation in urban growth areas.

Which areas offer the best lifestyle and value combination for residents?

For buyers seeking to live in Costa Rica, certain regions provide optimal combinations of lifestyle quality, amenities, and future value appreciation potential.

Escazú and Santa Ana in the Central Valley offer modern amenities including international schools, quality healthcare, shopping centers, and business services while maintaining stable property appreciation. These areas provide urban convenience with mountain views and easy airport access.

The Southern Pacific region, particularly Uvita and Dominical, combines natural beauty with growing expat communities, eco-living opportunities, and rising property values. These areas offer excellent beaches, national park access, and sustainable living options.

Nosara, Samara, and Puerto Viejo provide boutique lifestyle experiences with active expat communities, unique cultural offerings, and strong future growth potential. Each offers distinct character while maintaining good infrastructure and services.

Coastal areas near Tamarindo provide resort-style living with international amenities, though at higher cost points. These locations offer established infrastructure, healthcare access, and strong resale potential.

It's something we develop in our Costa Rica property pack.

Mountain locations like Monteverde and areas around San Gerardo de Dota offer cooler climates, eco-tourism opportunities, and lower cost living while maintaining access to essential services and future appreciation potential.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Costa Rica versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What areas and property types deliver the strongest rental returns?

Where should buyers focus for maximum resale profit potential?

Buyers targeting resale profits in 2-5 years should focus on specific market segments and geographic areas positioned for above-average appreciation during Costa Rica's market recovery phase.

Up-and-coming coastal areas with improving infrastructure represent the strongest resale opportunities, particularly locations near new highway projects or airport improvements that will increase accessibility and attract more development.

Modern condominiums in urbanizing satellite towns around San José offer strong resale potential as these areas benefit from urban spillover growth while maintaining more affordable entry points than established neighborhoods.

Turnkey villas in established eco-resort areas provide excellent resale prospects, especially properties with sustainable features, ocean or mountain views, and proven rental histories that appeal to investor-buyers.

Well-serviced land parcels in growth corridors offer some of the highest profit potential, though requiring more market knowledge and development expertise. These opportunities work best for buyers comfortable with longer hold periods and development processes.

Properties that have been significantly discounted during the recent market correction, particularly luxury coastal properties that dropped 30-40% from peaks, may offer strong resale opportunities as markets normalize and international demand returns to pre-correction levels.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Costa Rica Real Estate Market Analysis Video
2. GAP Real Estate Market Update 2025
3. Dave Hollander Real Estate Market Update
4. The Latin Investor Housing Market Analysis
5. The Latin Investor Market Overview
6. The Latin Investor Property Guide
7. OSA Property Management 2025 Forecast
8. eSales International Market Outlook
9. 2 Costa Rica Real Estate Market Insights
10. Coldwell Banker Market Predictions