Authored by the expert who managed and guided the team behind the Costa Rica Property Pack
Everything you need to know before buying real estate is included in our Costa Rica Property Pack
What is happening in Costa Rica’s real estate market? Are prices going up or down? Is Guanacaste still a hotspot for foreign investors? How is Costa Rica’s government impacting real estate policies and taxes in 2025?
These are the questions everyone is asking us every day—professionals, buyers, and sellers alike, from San José to the Nicoya Peninsula and beyond. Perhaps you’re wondering the same thing.
We know this because we stay deeply connected with local professionals and people like you, diving into the Costa Rican real estate market every single day. That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market trends and dynamics.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Property prices will rise slowly but steadily as demand surpasses supply in key areas
Property prices in Costa Rica are on the rise, driven by high demand in popular areas.
In places like the Central Valley and coastal regions, expats and retirees are flocking, boosting the need for homes. These areas are hot spots, making them prime targets for those looking to invest or settle down.
But here's the catch: housing supply isn't keeping up. A 2024 report shows a big gap between what's available and what people need. For example, a whopping 90% of housing solutions only serve 30% of households, leaving many without affordable options.
In the Greater Metropolitan Area, there's a shortage of over 148,000 homes, according to 2023 data. This shortage is a real issue, especially for locals who find it tough to secure housing.
Adding to the mix, Costa Rica's stable politics and friendly property laws for foreigners are attracting international buyers. Regions like Guanacaste and the Pacific Coast are seeing high demand that often outstrips supply, creating a seller's market.
Real estate agents are witnessing bidding wars and quick sales, a clear sign of strong demand and limited supply. If you're considering buying, be prepared for competition and rising prices.
Sources: Tico Times, Pura Vida Escrow and Trust
2) Costa Rica's rental yields will stay stable, with slight variations by location and property type
Costa Rica's rental market is holding steady, with only minor shifts depending on where and what type of property you invest in.
In San José, houses offer the best returns at 8.6%, while apartments aren't far behind at 7.5%. This consistency suggests that investors can expect reliable income from their properties.
The vacation rental scene is booming, with a 24% jump in listings over the past year. Occupancy rates have climbed to 38.9% as of May 2024, which is even better than before the pandemic.
With more tourists flocking in, the average daily rate for rentals is on the rise, meaning property owners are seeing higher earnings. This trend is a good sign for anyone looking to invest in vacation rentals.
On the economic front, Costa Rica's economy is expected to grow steadily, with low inflation predicted for the next five years. This stable economic climate helps keep rental income strong and property values steady.
Sources: Global Property Guide, Investing Costa Rica, Investing Costa Rica
We made this infographic to show you how property prices in Costa Rica compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) New short-term rental rules are impacting property profitability in tourist-heavy areas
New regulations on short-term rentals in tourist hotspots like Costa Rica are shaking up the property market.
Property owners are now facing higher operational costs due to these regulations. For instance, Bill 23766 mandates that owners register with the Costa Rican Tourism Institute, implement digital invoicing, and comply with strict hygiene and safety standards. Plus, they need to maintain liability insurance, which all adds up to increased expenses for running a short-term rental.
On top of that, new taxes are making it even tougher. There's a proposed 5% tax on short-term rentals aimed at funding national park improvements, but it means more costs for owners. Add a 13% sales tax and possibly a 30% income tax, and you can see how these financial burdens are eating into rental income.
With these challenges, some property owners might consider switching from short-term to long-term rentals. This shift could be a way to ensure a steady income stream amidst the new regulations. If more owners make this move, we might see a decrease in the supply of short-term rentals, which would change the market dynamics in these tourist-heavy areas.
Sources: Quatro Legal, Expat-Tations, Costa Rica Guide
4) Rents in tourist hotspots like Manuel Antonio will increase due to high demand and limited availability
In popular tourist spots like Manuel Antonio, rents are expected to climb due to high demand and limited availability.
Manuel Antonio, a top destination in Costa Rica, draws over a million visitors each year. This influx fuels a strong vacation rental market, with an occupancy rate of 56.30% for properties with more than 150 listings. The average daily rate here is higher than the national average, showing strong demand and high occupancy.
The scarcity of land for new construction is a key factor in rising rental prices. With existing properties in high demand, the limited coastal land pushes property values up. This is further driven by the booming tourism industry and the need for vacation rentals.
In Manuel Antonio, the real estate market has seen a steady increase in property values since 2023. This is largely due to the high demand for vacation rentals and luxury homes, combined with the scarcity of developable land near the coast.
As a result, the area is experiencing a surge in property values, making it a hot spot for investors. The combination of high tourist numbers and limited land availability creates a perfect storm for rising property prices.
Sources: Investing Costa Rica, RE/MAX Costa Rica
5) Interest in properties with flexible spaces for remote work and home offices is growing
In 2023 and 2024, people are rethinking their living spaces to better suit their needs.
According to The McLemore Group, there's a noticeable surge in demand for homes with dedicated office spaces and flexible floor plans. This shift is largely driven by the need for functional home offices as more people work remotely.
In Costa Rica, Tecnimuebles reports a rise in sales of home office furniture, like modular desks and workstations. This trend highlights how people are investing in creating effective work environments at home, not just buying furniture.
Real estate agents in Costa Rica are seeing more inquiries for properties with dedicated office spaces. This shows that homebuyers are prioritizing remote work capabilities when choosing a home.
There's a clear demand for homes that support a remote work lifestyle, with increased interest in adaptable layouts and flexible spaces. People want homes that can easily transform to meet their work-from-home needs.
Sources: The McLemore Group, Tecnimuebles
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6) Demand is rising for properties with reliable internet and modern infrastructure access
Properties with reliable internet and modern infrastructure are hot commodities in Costa Rica.
In 2023, Costa Rica saw internet penetration reach 89.6% of its population, a notable jump from the previous year. This surge in connectivity is a clear sign that people are increasingly valuing properties with dependable internet access. It's not just about browsing; it's about staying connected in a world that demands it.
Mobile broadband subscriptions in Costa Rica have also skyrocketed, hitting nearly 5.2 million in 2023. That's about 102 subscriptions for every 100 people, showing just how crucial connectivity has become in everyday life. For property buyers, this means homes with strong internet infrastructure are more appealing than ever.
Costa Rica is a magnet for digital nomads, ranking 13th on the Digital Nomad Index and 3rd best in Latin America for remote work. The country’s high-speed internet and favorable conditions make it a top choice for remote workers. The introduction of a digital nomad visa has further fueled the demand for properties with reliable internet, as more remote workers look to settle here.
Sources: DataReportal, Statista, Chambers
7) Rental yields in coastal areas like Tamarindo will increase due to high tourist demand and limited rental supply
In 2023, Costa Rica welcomed over 2.75 million tourists, marking a significant rebound in tourism.
Tamarindo, with its stunning beaches and lively vibe, is a top choice for these visitors. This coastal gem has been riding the wave of increased tourism, drawing in crowds eager to soak up the sun and surf. The town's popularity is not just about its natural beauty; it's also about the vibrant atmosphere that keeps tourists coming back.
One reason Tamarindo is a hot spot for property investors is its high occupancy rate for short-term rentals. In 2023, the town boasted an impressive 55.30% occupancy rate, one of the highest in Costa Rica. This figure highlights the strong demand for rental properties, as tourists flock to the area looking for places to stay.
Adding to the allure for investors is the limited availability of rental properties during peak seasons. Unlike Jaco, which has plenty of listings, Tamarindo's rental market is tight. This scarcity means tourists often compete for available spots, pushing rental prices higher and making it a profitable venture for property owners.
With the combination of high demand and limited supply, rental yields in Tamarindo are expected to rise. This trend is driven by the town's appeal and the steady stream of tourists eager to experience its charm. For those considering buying property, Tamarindo offers a promising opportunity.
Sources: Investing Costa Rica, Costa Rica Tourism Statistics, EIN Presswire
8) Gated communities are gaining appeal for their perceived safety and community amenities
Gated communities are becoming more attractive in places like Costa Rica.
With rising crime rates in urban areas, many people are seeking safer living options. In Costa Rica, the homicide rate has climbed to 17.2 per 100,000 people in 2023, making a significant portion of the population feel unsafe. In fact, 65.5% of people in 2022 considered the country not very or not at all safe.
Gated communities provide the security that residents crave, featuring 24-hour security, controlled access points, and surveillance systems. This setup is especially appealing to families and retirees who prioritize safety. Expatriates and foreign homebuyers are also drawn to these areas, with many property sales occurring in gated communities.
Beyond safety, the allure of gated communities lies in their amenities. They often boast exclusive features like private pools, fitness centers, and tennis courts. These amenities not only enhance the quality of life but also foster a strong sense of community through organized social events and activities.
Living in a gated community means enjoying a blend of security and community living, making it an ideal choice for many. The combination of safety measures and community amenities is a significant draw for potential buyers.
Sources: Infosegura, RE/MAX Jaco Beach Costa Rica Real Estate, Costa Rican Real Estate: 2023, By the Numbers
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Costa Rica. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
9) Digital nomadism is boosting demand for flexible short-term rentals in scenic areas
Digital nomadism is booming, with millions working remotely while exploring the world.
In 2024, there are about 35 million digital nomads globally, many from the U.S., seeking flexible rentals in beautiful spots like Costa Rica. This trend is reshaping the rental market, especially in scenic areas where these nomads prefer to stay.
Costa Rica is a hotspot for digital nomads, thanks to its Digital Nomad Visa introduced in 2022. This visa lets remote workers live and work in the country for a year, offering a perfect blend of work and leisure in stunning surroundings.
The country’s favorable tax policies, including a tax-free period and reasonable income requirements, make it even more appealing. These incentives are drawing more remote workers who want to enjoy Costa Rica's natural beauty while working.
There's a noticeable rise in Airbnb listings in Costa Rica's scenic areas, reflecting the demand for short-term rentals. This is further boosted by investments in co-working and co-living spaces, catering to digital nomads' needs for flexible work environments.
Social media and testimonials from digital nomads highlight Costa Rica's allure, showcasing its natural beauty and flexible living options. This buzz is attracting more remote workers, eager to experience the lifestyle.
Sources: Pumble, Holafly, Chambers, WEF, EVERKI
10) San José’s property prices are stabilizing after rapid growth as the market becomes more balanced
San José's property market is finally calming down after years of rapid growth.
In 2024, the median home price rose by just 4.6%, a noticeable slowdown compared to the past. This is a sign that the market is finding its balance. If you're considering buying, this could mean fewer bidding wars and more options to choose from.
Home prices have hit a plateau, with the median sale price per square foot at $889, up 7.6% from last year. While this is still an increase, it's much slower than the pandemic boom. The median home price is now around $1.4 million, slightly down from last year, showing a leveling off.
Inventory levels are on the rise, which is good news for buyers. As of October 2024, there were about 1,526 active listings, a 4.8% increase from the previous month. This means more choices and potentially better deals as supply starts to meet demand.
New construction is also playing a role in this stabilization. Builders are catching up, adding more homes to the market, which helps ease the pressure on prices. This is a great time to explore new developments if you're in the market for a fresh start.
With these changes, San José is becoming a more balanced market, offering opportunities for both buyers and sellers. If you're thinking about investing, now might be the time to dive in.
Sources: The Luxury Playbook, What's My Cash Flow, Norada Real Estate
11) San José rental yields may dip slightly as more properties increase competition among landlords
San José is buzzing with new residential developments popping up everywhere.
In 2022, the city saw a construction boom with 44,265 new projects kicking off, a 9.2% jump from the previous year. This surge means more rental properties are hitting the market, which could lead to higher vacancy rates and potentially lower rental yields.
While the rental market was strong through 2023 and 2024, with a low vacancy rate of 3.8%, the demand might not keep pace with the growing supply. As more properties are completed and listed, landlords could face stiffer competition, possibly nudging rental yields downward.
Media reports are buzzing about an oversupply of rental properties in San José. This glut could push landlords to lower rents to attract tenants, squeezing rental yields even further. Real estate agents are also noticing this trend, sharing stories of increased competition among landlords.
With more properties available, landlords might have to get creative to stand out. This could mean offering perks or lowering rents, which would impact rental yields. The market dynamics are shifting, and landlords need to adapt to stay competitive.
As the landscape changes, potential buyers should keep an eye on these trends. Understanding the local market and its challenges can help in making informed decisions about property investments in San José.
Sources: Global Property Guide, The Luxury Playbook, GAP Real Estate
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12) Property prices in Ojochal and Uvita are rising notably due to growing interest from eco-conscious buyers in the Southern Zone
In Costa Rica's Southern Zone, areas like Ojochal and Uvita are seeing a notable rise in property prices due to increased interest from eco-conscious buyers.
In 2024, Ojochal was buzzing with activity, selling 65 properties and reaching an average home value of $679,295. This shows a strong demand for homes in the area. Meanwhile, Uvita is catching eyes with its average price per acre at $320,000, making it a hotspot for new developments.
The Southern Zone is becoming a hub for eco-friendly developments, attracting buyers who are all about green living. These projects focus on sustainable practices, which are a big draw for the growing number of eco-conscious buyers and renters. The demand for properties with eco-certifications is on the rise, showing a clear interest in sustainable living.
Surveys highlight a significant interest in sustainable living among buyers, with a growing demand for eco-friendly properties. The media is also shining a light on the Southern Zone's appeal for eco-conscious folks, emphasizing its natural beauty, biodiversity, and eco-friendly developments.
Eco-tourism is booming in the region, bringing in conservation success and income for locals. This wave of tourists is boosting local economies and driving the demand for sustainable housing projects. Real estate agents are seeing more inquiries from environmentally-minded buyers, indicating a strong market for eco-friendly properties.
International buyers are flocking to Costa Rica, drawn by its commitment to sustainability and the Southern Zone's natural beauty. Infrastructure is getting a green upgrade to support eco-friendly lifestyles, with initiatives like the UrbanShift program leading the way.
Sources: Osa Tropical Properties, Shift Cities, Century 21 Ballena Properties, Frontiers in Sustainable Tourism, Osa Tropical Properties
13) Eco-friendly properties in the Southern Zone are attracting more interest from foreign buyers
Foreign buyers are showing growing interest in eco-friendly properties, especially in Costa Rica's Southern Zone.
In Costa Rica, the real estate market is buzzing with demand for eco-friendly homes. This surge is fueled by the country's dedication to sustainability, making it a magnet for those who care about the environment. Buyers are particularly drawn to properties that incorporate renewable energy sources and sustainable materials.
The Southern Zone, with its breathtaking landscapes and rich biodiversity, is becoming a prime spot for eco-friendly real estate developments. These projects cater to the increasing desire for sustainable living, especially among foreign buyers who are captivated by the area's natural allure.
The Costa Rican government is also playing a big role by offering incentives for sustainable construction. These include tax breaks and technical subsidies, which have spurred the growth of eco-friendly real estate. Such support makes investing in sustainable properties even more attractive to foreign buyers.
Sources: Osa Tropical Properties Market Projections Report
14) Foreign buyers from North America and Europe will increasingly target Costa Rica for stable investment opportunities
The number of foreign buyers in Costa Rica is on the rise, especially from North America and Europe.
Many are drawn by Costa Rica's stable investment opportunities, with a noticeable uptick in property ownership among expatriates from the U.S. and Canada. By 2021, around 70,000 U.S. expatriates were calling Costa Rica home, showcasing its allure for North American investors.
Interest from North American and European buyers is growing, fueled by Costa Rica's political and economic stability. Favorable exchange rates for these regions also play a role, making the country an attractive spot for those seeking reliable investments.
The real estate market in Costa Rica has been either stable or appreciating, which further encourages foreign investment. The country's economic growth and political stability are key factors, with foreign direct investment jumping by 42% in early 2024. This surge highlights the confidence foreign investors have in Costa Rica's market.
For those considering a move or investment, Costa Rica offers a unique blend of natural beauty and economic promise. The combination of favorable exchange rates and a stable market makes it a compelling choice for international buyers.
Sources: Gap Real Estate, Invest in Costa Rica
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.
15) Costa Rica's aging population boosts demand for retirement-friendly properties, especially in the Central Valley
Costa Rica is experiencing a noticeable rise in its aging population, with 13.63% of people aged 65 or older in 2022.
This shift is driving a surge in demand for retirement-friendly properties, particularly in the Central Valley. Known for its vibrant culture and excellent schools, the Central Valley offers a mix of urban and suburban living, making it a top choice for retirees.
Housing options in the Central Valley are diverse, ranging from luxurious condos to affordable homes, catering to various tastes and budgets. This variety is a big draw for those looking to settle down in a comfortable environment.
The real estate market here is booming, with property values on the rise due to the increased demand for homes and business spaces. This trend is a testament to the area's growing popularity among retirees.
One of the key attractions of the Central Valley is Costa Rica's excellent healthcare system, which includes a network of hospitals and clinics accessible to everyone, including the elderly. This makes it an ideal location for those seeking a convenient lifestyle.
With these factors in play, the Central Valley stands out as a prime destination for retirees looking for a blend of comfort and convenience.
Sources: AARP International, Gap Real Estate, International Living, Tico Times
16) Recent tax reforms are influencing property investment choices, especially among foreign buyers
Recent tax reforms in Costa Rica are shaking up the property market, especially for foreign buyers.
One major change is the adjustment in property tax rates. The government is considering a tiered tax rate system, meaning different types of properties could be taxed at varying rates. This is crucial for foreign buyers with high-end or multiple properties, as they might face higher taxes than before. Additionally, the real estate transfer tax, which is 1.5% of the property's sale price or its registered value, is another factor that foreign buyers need to consider. This tax affects both buyers and sellers, making it a crucial part of the decision-making process.
Another significant reform is the introduction of a corporate tax bill with a 30% tax rate on net revenues. This move aims to align Costa Rica with EU requirements and could influence foreign investment patterns by impacting the overall business environment. Foreign buyers are also concerned about the potential for unexpected tax liabilities. Changes in VAT or property tax rates could lead to higher costs than anticipated, affecting their financial planning and investment decisions.
Foreign investors are particularly attentive to these changes, as they could alter the landscape of property investment in Costa Rica. The new tax structure might make it more expensive to own multiple properties, especially luxury ones. This could lead to a shift in investment strategies, with buyers possibly looking for more affordable options or reconsidering their investment plans altogether.
For those eyeing Costa Rica as a potential investment destination, understanding these tax reforms is essential. The changes could mean that owning property in Costa Rica becomes a more complex financial decision. Investors need to be aware of how these reforms might affect their long-term financial goals and adjust their strategies accordingly.
As the government continues to implement these reforms, staying informed is key for anyone considering property investment in Costa Rica. The evolving tax landscape could present both challenges and opportunities, depending on how investors navigate the new rules. Being proactive and seeking expert advice can help in making informed decisions that align with one's investment objectives.
Sources: Osa Property Management, Taxes for Expats, PwC
17) Virtual reality and online tours are making it easier for international buyers to explore properties remotely
Virtual reality and online property tours are becoming a game-changer for international property buyers.
Imagine exploring a charming countryside home without leaving your couch. Thanks to virtual tours, this is now a reality. The market for these tours is booming, with projections showing it could skyrocket to nearly $18 billion by 2035. This surge is reshaping how people buy homes, especially those from abroad.
Why the buzz? It's all about the experience. With the latest in VR and AR tech, you can step into a property and feel like you're really there. This immersive experience is a hit, making it easier for buyers to picture themselves in a new home, all without hopping on a plane.
For international buyers, this is a game-changer. Virtual tours let them explore properties from anywhere, saving time and money. This convenience is transforming the buying process, with some homes even selling before they're built, thanks to these digital previews.
Media outlets are buzzing about this trend, highlighting how it's opening doors for buyers worldwide. The ability to tour a property remotely is not just a perk; it's becoming a necessity in today's fast-paced market. International sales are climbing as a result, with more buyers sealing deals from afar.
As the demand for virtual tours grows, expect to see even more innovation in this space. It's not just about seeing a property; it's about experiencing it in a way that feels real and personal. This shift is reshaping the real estate landscape, making it more accessible and exciting for everyone.
Sources: Digital CXO, ADS Marketing
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18) Blockchain adoption in real estate will boost transparency and efficiency in transactions
Blockchain is revolutionizing real estate, making transactions smoother and more secure.
In recent years, blockchain-based property deals have surged worldwide, thanks to the transparency and efficiency it brings. Imagine buying a house without the usual paperwork hassle; that's the magic of blockchain. It's like having a digital ledger that everyone trusts, cutting out the middlemen and speeding up the process.
Take Costa Rica, for example. The Bitcoin Jungle movement in Costa Ballena is a shining example of how blockchain is changing the game. Since 2021, over 50 market vendors and 30 businesses have embraced the Bitcoin Jungle wallet for payments. This shift not only saves them money on credit card fees but also makes transactions quicker and more secure.
Blockchain isn't just about payments; it's transforming how properties are bought and sold. By reducing the need for banks and lawyers, property transfers and leases are now more independent and secure. In Costa Rica, reports from Ticonstru show how blockchain is boosting trust and efficiency in real estate, making it a go-to choice for many.
Imagine a world where buying property is as easy as sending an email. That's what blockchain is aiming for, and it's already happening in places like Costa Rica. The technology is making real estate transactions not just faster but also more reliable, cutting out unnecessary steps and costs.
As blockchain continues to grow, expect to see more of its influence in real estate. It's not just a trend; it's a shift towards a more transparent and efficient way of doing business. If you're considering buying property, understanding blockchain could be your key to a smoother transaction.
Sources: Osa Tropical Properties, Ticonstru, AscendixTech
19) Foreign buyers in Costa Rica are increasingly drawn to sustainable and community-focused real estate developments
Foreign interest in Costa Rican real estate is shifting towards sustainable and community-focused developments.
In Costa Rica, there's a noticeable trend where eco-friendly properties are selling quickly, especially in areas like Dominical. This is largely because these properties use renewable energy and sustainable materials, which are becoming increasingly popular among buyers. People are more interested in living sustainably, and this is reflected in the growing demand for such homes.
Real estate listings now often highlight features like solar panels and Energy Star appliances, which attract environmentally conscious buyers. The media is also focusing more on the benefits of eco-friendly developments, which helps boost their appeal. The Costa Rican government is playing a role too, offering incentives for sustainable building practices, making it easier for developers to go green.
In places like Dominical, the use of renewable energy sources is a big selling point. Buyers are drawn to properties that not only offer a beautiful location but also align with their values of sustainability. This shift is part of a broader cultural movement towards eco-conscious living, which is gaining momentum worldwide.
Developers are responding to this demand by incorporating sustainable building materials into their projects. This not only meets the expectations of buyers but also supports Costa Rica's commitment to sustainability. The country's focus on eco-friendly practices is making it a leader in sustainable real estate.
As more people look for homes that reflect their environmental values, the trend towards community-focused developments is expected to grow. These developments often include shared spaces and resources, promoting a sense of community and sustainability. Costa Rica's real estate market is evolving to meet these new demands, offering buyers more options that align with their lifestyle choices.
Sources: Niko Rilifestyles, Pura Vida Escrow and Trust, RE/MAX CDS
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.