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Costa Rica's residential property market is experiencing a significant correction in September 2025, with luxury coastal areas seeing dramatic price drops while urban centers show resilience.
The market has shifted from the speculative highs of 2021-2023 to a buyer's market, with national average prices showing mixed signals depending on location and property type. While luxury coastal properties in Guanacaste have dropped 31-36%, urban areas like San José and premium suburbs are actually seeing price increases.
If you want to go deeper, you can check our pack of documents related to the real estate market in Costa Rica, based on reliable facts and data, not opinions or rumors.
Costa Rica's residential property market shows a clear divide between luxury coastal areas experiencing 30-40% price drops and urban centers with stable or rising prices.
Rental yields have improved to 7.84% in Q2 2025, making it an attractive market for buy-to-let investors despite the price corrections in certain segments.
| Market Segment | Price Change (2024-2025) | Current Status |
|---|---|---|
| Luxury Coastal Properties (Guanacaste) | -31% to -36% | Buyer's market, oversupply correction |
| San José Urban Properties | +9.2% (Escazú/Santa Ana) | Strong expat demand driving growth |
| National Average (per sqm) | $988 to $1,021 | Modest increase overall |
| Rental Market | Stable to rising | 7.84% average yields, strong demand |
| Transaction Volume | -10% nationally | Faster sales due to price corrections |
| Foreign Investment | +18% in 2024 | 40% of transactions, shifting preferences |
| Short-term Forecast | Stabilization expected | 5-12% annual appreciation projected |
What's the current average sale price for residential properties in Costa Rica compared to last year?
The national average sale price per square meter has increased from $988 in 2024 to $1,021 in September 2025, representing a 3.3% rise.
However, this national average masks significant regional variations. In city centers, house prices range from $1,110 to $1,300 per square meter, while condos can reach $1,724 per square meter as of September 2025.
San José shows mixed signals with apartments averaging $2,343 per square meter in mid-2025, but the median house price has dropped dramatically to $533,647, down 41% from $907,769 in 2024. This reflects the market's shift toward apartment living and away from single-family homes in urban areas.
The disparity between apartment and house prices indicates changing buyer preferences, with urban apartments maintaining or increasing value while larger residential properties face downward pressure.
Are property prices dropping nationwide or only in specific provinces and areas?
Price corrections are concentrated in luxury and investor-driven coastal regions, particularly Guanacaste and parts of the Central Pacific coast.
Cities like San José and premium suburbs including Escazú and Santa Ana are experiencing price increases, especially for apartments and condos. Escazú and Santa Ana specifically show 9.2% year-over-year growth due to strong expat demand.
The Southern Zone presents a mixed picture, with some areas seeing growth up to 42% as buyers seek sustainable investment opportunities, while other subregions have experienced a 10% drop from recent peaks due to oversupply. The Caribbean and Limón provinces remain stable with slow but steady growth, positioning themselves as emerging eco-tourism markets.
Puntarenas shows regional variation, with areas like Jacó experiencing recovery and 3-9% price growth, while other parts of the province remain soft.
Which specific areas and property types are experiencing the largest price declines?
Luxury coastal homes in Guanacaste province are experiencing the steepest declines, with prices down 31-36% year-over-year after a speculative run-up between 2021-2023.
The median home price in Guanacaste has fallen to $967,506, representing a 36% decrease from 2024, while luxury properties in the region now average $1.7 million, down 31% from previous levels.
Single-family houses nationally show median price drops of 29-41% over the 2024-2025 period, with the most severe corrections occurring in high-end coastal towns that experienced the most dramatic appreciation during the pandemic boom.
Condos are also seeing corrections in some urban and tourist areas, though urban centers demonstrate more stability than coastal resort markets.
Are rental prices following the same trend as sale prices or moving differently?
Rental prices are moving in the opposite direction from sale prices, remaining stable or increasing in prime areas despite the property price corrections.
Urban and expat-oriented apartments show particularly strong rental growth, with two-bedroom units in Escazú commanding approximately $1,200 per month, while downtown San José one-bedroom apartments range from $550-850 monthly.
Tourist rentals through platforms like Airbnb face more competition with increased listings, leading to slightly weaker occupancy rates and some pricing pressure in 2025. However, the overall rental market remains buoyed by tourism recovery and growing digital nomad demand.
The rental market's resilience contrasts sharply with the sale price corrections, creating attractive opportunities for investors seeking rental income rather than capital appreciation.
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What's happening to rental yields and investment returns for property owners?
Rental yields have improved significantly, averaging 7.84% in Q2 2025, up from 7.27% in Q3 2024.
Central Valley urban rentals are performing particularly well, with some properties achieving yields of 8-8.3%, making them attractive for buy-to-let investors. The combination of stable or rising rents with corrected purchase prices has created favorable conditions for new investors.
The outlook for rental yields remains positive due to consistent demand from expats, digital nomads, and steady tourism recovery. Property owners in urban areas and established tourist zones are seeing consistent to improving returns on their investments.
This yield improvement represents one of the few bright spots in the current market, offering investors a path to returns even during the price correction phase.
It's something we develop in our Costa Rica property pack.
Are the reported price drops supported by official data or based on rumors?
The reported price declines are backed by official transaction records and listing statistics, not anecdotal evidence.
The documented 41.2% year-over-year drop in median home prices as of January 2025 and similar corrections in Guanacaste luxury markets are based on verified sales data and comprehensive market analysis.
Multiple real estate agencies and property management companies have reported consistent findings showing significant corrections in luxury coastal segments, while urban market data confirms the resilience of apartment prices in cities like San José.
These statistics come from registered property transactions, MLS data, and official real estate market reports, providing a reliable foundation for market analysis and investment decisions.
How do current transaction volumes compare to last year's activity?
National sales volume dropped 10% in 2024, with luxury and single-family home segments experiencing the most significant declines.
| Property Type | Volume Change | Market Impact |
|---|---|---|
| Luxury Home Transactions | -43% | Severe correction in high-end coastal markets |
| Condo Sales (2025) | -39% | Urban markets more resilient than coastal |
| Single-Family Homes | -10% | Moderate decline, faster sales due to pricing |
| Days on Market | Improved | Properties selling faster as prices adjust |
| Overall Market Activity | -10% | Stabilizing with increased buyer activity |
What are the main factors driving these price changes?
Costa Rica's economic growth of 4% in 2024 and projected 3.5% in 2025 supports long-term market stability, but several factors are creating regional variations.
Currency appreciation has made Costa Rica more expensive for North American buyers, affecting foreign investment patterns in certain price segments. The stronger colón particularly impacts luxury coastal properties that heavily depend on foreign buyers.
A post-pandemic correction is unwinding excess speculation and inventory buildup that occurred between 2021-2023, especially in coastal luxury markets. This correction is bringing prices back to more sustainable levels relative to local economic fundamentals.
Infrastructure improvements including Starlink internet coverage, airport upgrades, and eco-tourism initiatives are supporting demand and price resilience in specific regions, while tax and residency incentives for foreigners continue to attract urban and rural investment.
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.
Is foreign buyer demand increasing, decreasing, or remaining stable?
Foreign buyer demand has increased by 18% in 2024, with international investors still accounting for nearly 40% of all property transactions.
The primary source countries remain the United States, Canada, and Europe, but buyer preferences are shifting significantly. Demand for luxury beachfront properties has cooled substantially, while urban areas, rental-income properties, and eco-tourism locations are attracting increased foreign investment.
This shift reflects a maturation of the foreign buyer market, with investors becoming more focused on yield-generating properties rather than speculative luxury purchases. The trend suggests sustained foreign interest but with more strategic, income-focused investment approaches.
Further growth in foreign investment is expected through 2025, particularly in segments that offer strong rental yields and long-term appreciation potential rather than immediate capital gains.
Are prices likely to continue dropping in the short term based on current trends?
Luxury coastal segments are likely to stabilize after their significant corrections, with minimal additional dramatic declines expected through late 2025.
Urban and expat-preferred regions are positioned for price increases, especially for apartments and condos that benefit from rental demand and infrastructure improvements. Areas like San José, Escazú, and Santa Ana should continue seeing modest appreciation.
The rental market is forecast to maintain stable to rising rents in prime areas, with short-term price gains expected in markets where inventory has normalized and transaction activity has increased.
Some coastal areas may present bargain opportunities with slight further reductions, but the dramatic 30-40% corrections appear to be largely completed, suggesting a bottoming-out process rather than continued steep declines.
It's something we develop in our Costa Rica property pack.
What does the medium to long-term outlook look like for Costa Rica's property market?
Market stabilization is expected following the current correction phase, with forecasts projecting 5-12% annual appreciation depending on region and property type.
Apartments and properties in strong rental markets are expected to show the fastest growth, supported by continuing expat migration and digital nomad trends. Infrastructure development and eco-tourism expansion will continue supporting medium to long-term gains in emerging areas like the Caribbean coast and Southern Zone.
Political and economic stability provide a foundation for long-term investor confidence, with Costa Rica's democratic institutions and growing economy supporting sustained real estate demand from both foreign and domestic buyers.
The market is transitioning from speculative growth to fundamental value-driven appreciation, creating a more sustainable foundation for long-term real estate investment returns.
What's the smartest strategy for property buyers in the current market?
Target buyer's markets in regions with overcorrected luxury and second-home prices, particularly coastal areas that have experienced 30%+ price drops.
- Focus on strong rental yield markets: Urban areas like San José, Escazú, Santa Ana, and recovering coastal towns like Jacó offer the best combination of income potential and appreciation prospects.
- Consider emerging eco-tourism areas: Caribbean and Southern Zone properties offer value entry points with longer-term upside potential as infrastructure and tourism develop.
- Negotiate aggressively: Rising inventory and longer listing times provide significant buyer leverage, especially in luxury coastal segments.
- Prioritize cash purchases: High mortgage rates of 7.5-10% for locals and higher for foreigners make cash deals essential for optimal ROI.
- Focus on fundamentals: Evaluate properties based on rental potential, infrastructure access, and long-term growth drivers rather than speculative appreciation alone.
The current market presents the best buying opportunities in years for investors with cash and a medium to long-term investment horizon.
It's something we develop in our Costa Rica property pack.
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.
Costa Rica's real estate market in September 2025 presents a tale of two markets: luxury coastal properties completing their correction cycle while urban centers and rental markets show continued strength.
For investors, this environment offers the best buying opportunities in recent years, particularly for those focused on rental yields and long-term appreciation in fundamentally strong markets.