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House prices in Guanacaste experienced a dramatic surge from 2020 to 2023, followed by a significant correction in 2024.
As of September 2025, the market shows signs of stabilization with increased inventory and more negotiating power for buyers. Property prices remain 300-400% above pre-pandemic levels, though foreign buyer activity continues to drive demand in coastal areas. The combination of infrastructure development, tourism projects, and government incentives suggests the market is finding its new equilibrium rather than facing a major collapse.
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Guanacaste house prices are unlikely to crash but may see modest declines of 5-10% in 2025-2026 as the market continues correcting from the 2020-2023 boom.
Current market conditions favor buyers with increased inventory, longer time on market, and frequent price reductions, particularly in the luxury segment above $1 million.
| Market Indicator | Current Status (Sept 2025) | Trend Direction |
|---|---|---|
| Average Price per m² | $1,530 (houses) / $2,221 (high-end) | Stabilizing after 31-36% correction |
| Inventory Levels | 15-24% above 2024 levels | Increasing (buyer's market) |
| Time on Market | 418 days average | Improving (28% faster than 2024) |
| Price Reductions | 276 properties (avg 10.2% reduction) | High frequency continuing |
| Foreign Buyer Share | 40% of transactions | Stable at elevated levels |
| Mortgage Rates | 7.61% average | Declining from 9%+ in 2023 |
| New Supply | 25% of national construction | Strong development pipeline |
What has been the average price per square meter for homes in Guanacaste over the past 5 years?
The Guanacaste housing market experienced extraordinary price volatility between 2020 and 2025, with dramatic increases followed by significant corrections.
In 2020, average coastal home prices in Guanacaste started around $100,000. By 2023, these same properties had surged by an unprecedented 400% to reach $400,000-$500,000, translating to $2,725-$3,298 per square meter for beachfront properties.
The market reached its peak in late 2023, but early 2024 brought a substantial correction. Property values dropped by 31-36% as the post-pandemic boom cooled and buyer demand normalized.
As of September 2025, the average price per square meter for houses in Guanacaste stands at $1,530, while higher-end properties command $2,221 per square meter. Condominiums average $2,896 per square meter. Prime coastal areas like Tamarindo, Flamingo, and Nosara continue to command premium prices ranging from $966 to $6,302 per square meter.
Despite the 2024 correction, current prices remain 300-400% above pre-pandemic levels, particularly in coastal zones where foreign buyer interest remains strong.
How much new housing supply is planned or under construction in Guanacaste in the next 12 to 24 months?
Guanacaste leads Costa Rica in new construction activity, with robust development pipelines extending through 2026.
Nationwide, Costa Rica sees approximately 4,000 new homes built or sold annually, with Guanacaste capturing a disproportionate share of this activity. Construction permits in the province have increased by 17-18% annually during 2024-2025.
As of 2023 data, Guanacaste accounts for 25% of all buildings under construction in Costa Rica, making it the most active construction market in the country. Development hotspots include Tamarindo, Flamingo, and Playa Hermosa, where multiple residential projects are underway.
The tourism sector is driving additional development, with nine major hotel and tourism projects scheduled for completion between 2025-2026. While these are primarily commercial developments, they create secondary demand for residential housing to accommodate workers and support services.
This substantial supply pipeline suggests continued market activity but may also create additional inventory that could moderate price growth in the near term.
What is the current inventory of homes for sale in Guanacaste, and how does it compare to the historical average?
Guanacaste's housing inventory has increased significantly, creating more favorable conditions for buyers compared to the tight market of recent years.
Current inventory levels are up 15-24% from 2024, representing a clear shift toward a buyer's market. This increase reflects both new construction coming online and existing owners listing properties as prices stabilized.
Historical comparisons show inventory was much tighter during the boom years of 2020-2023, when buyer competition was intense and properties sold quickly with multiple offers. The current inventory surge gives buyers more options and significantly more negotiating power.
Unoccupied housing in Guanacaste reached 19.4% of all units by late 2024, the highest rate in Costa Rica. This elevated vacancy rate stems from both the growth in short-term rental properties and unsold new construction inventory.
The increased inventory represents a normalization from the extremely tight market conditions of the pandemic boom years, providing buyers with more choices and longer decision-making timeframes.
What percentage of listed homes in Guanacaste have had price reductions in the past 6 months?
Price reductions have become commonplace in the Guanacaste market as sellers adjust to new market realities following the post-pandemic correction.
| Property Price Range | Number of Reductions | Average Reduction Percentage |
|---|---|---|
| Under $500,000 | 142 properties | 8.0% |
| $500,000 - $1,000,000 | 89 properties | 10.5% |
| $1,000,000 - $2,000,000 | 32 properties | 13.6% |
| Above $2,000,000 | 13 properties | 15.2% |
| All Categories | 276 properties | 10.2% |
In 2025, there has been a record volume of price reductions, nearly double the number seen in 2024. A total of 276 properties have reduced their asking prices, with an average reduction of 10.2%.
Higher-end properties above $1 million have seen the largest percentage reductions, averaging 13.6% for properties in the $1-2 million range and 15.2% for ultra-luxury properties above $2 million. Lower-tier properties under $500,000 have seen more modest reductions averaging 8%.
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How many properties in Guanacaste are sold each month, and how has this changed year-over-year?
Transaction volumes in Guanacaste have increased substantially despite falling prices, indicating strong underlying demand at corrected price levels.
As of 2025, transaction volumes in Guanacaste surged 28% compared to 2023 levels. This increase demonstrates that buyers have returned to the market following the price corrections of 2024.
Across Costa Rica, single-family home sales grew modestly year-over-year from 2023 to 2024, but Guanacaste has significantly outperformed the national average. Total transactions are up 13.4% nationally, while Guanacaste shows much stronger growth.
The increased transaction volume despite lower prices suggests that the market correction has brought properties into a more affordable range for many buyers, particularly foreign investors who had been priced out during the peak boom period.
This pattern indicates healthy market functioning, where price adjustments have restored transaction volume and market liquidity.
What is the average time a property stays on the market before being sold in Guanacaste?
Properties in Guanacaste take significantly longer to sell than the national average, but selling times have improved markedly from 2024 levels.
The current average time on market for Guanacaste properties is 418 days, compared to the national average of 290-354 days. While this appears lengthy, it represents a 28% improvement from 2024 levels.
Properties are now selling 40% faster than they did last year, as buyers re-enter the market following price corrections. This improvement in selling velocity indicates that the market is finding more appropriate pricing levels.
The extended time on market compared to national averages reflects the higher price points in Guanacaste, the specialized nature of many coastal properties, and the reliance on foreign buyers who may require longer decision-making processes.
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What are the current mortgage interest rates in Costa Rica, and how have they changed over the last 12 months?
Mortgage interest rates in Costa Rica have declined substantially from their recent peaks, improving affordability for buyers.
As of September 2025, the average mortgage rate stands at 7.61%, down from 8.61% in early 2024 and over 9% in 2023. This downward trend has made financing more accessible for both local and qualifying foreign buyers.
The lowest recent rate was 6.11% in May 2022, before the post-pandemic inflation period drove rates higher. The current trend is stable to declining, which aids buyer affordability and market activity.
The improving interest rate environment has been a key factor in the increased transaction volumes seen in 2025, as financing costs have become more manageable for qualified borrowers.
For foreign buyers, access to Costa Rican mortgages remains limited, with many relying on cash purchases or financing from their home countries where rates may differ significantly.
How have rental prices in Guanacaste evolved in the last 2 years, and do they align with property price trends?
Rental prices in Guanacaste have increased substantially over the past two years, largely keeping pace with property price appreciation and providing strong yields for investors.
| Property Type | 2022 Monthly Rent | 2024 Monthly Rent | Rental Yield Range |
|---|---|---|---|
| Basic Inland Homes | $700-800 | $1,200-2,500 | 7-8% |
| Mid-range Condos | $1,000-1,500 | $2,000-5,000 | 8-9% |
| Prime Beachfront Luxury | $2,000-4,000 | $3,000-10,000 | 9-10% |
| Tourist Zone Apartments | $800-1,200 | $1,500-3,500 | 8-10% |
From 2020-2023, rental prices saw substantial increases, with basic homes reaching $700-800 per month and apartments commanding $800-1,500 monthly. By 2024, these figures had risen significantly across all categories.
Current rental yields range from 7-10%, which are particularly attractive in tourist hubs where short-term rental demand remains strong. The rental market has largely kept pace with property price increases, especially in coastal locations with tourism appeal.
The alignment between rental income growth and property price appreciation has helped maintain investor interest despite the price volatility, as cash flow potential remains attractive for well-located properties.
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 is the current level of foreign buyer activity in Guanacaste compared to previous years?
Foreign buyers continue to dominate the Guanacaste real estate market, maintaining elevated activity levels despite the recent price corrections.
Foreign buyers account for approximately 40% of all real estate transactions in Guanacaste, with Americans, Canadians, and Europeans leading the buyer demographics. This represents a substantial portion of market activity and indicates continued international interest.
Demand from foreign buyers soared during 2020-2023, driven by "digital nomads," remote workers, and lifestyle investors seeking beachfront properties. While this demand stabilized after 2024, it remains much higher than pre-2020 levels.
The sustained foreign buyer interest provides market stability and has prevented more dramatic price declines during the correction period. These buyers often have cash purchasing power and are less sensitive to local economic conditions.
Government incentives under Law 9996, which provides tax breaks for investments above $150,000, continue to attract foreign investment and support market activity.
How have employment rates and average incomes in Guanacaste and Costa Rica changed recently?
Employment conditions in Costa Rica have shown mixed trends, with local wage growth struggling to keep pace with the real estate boom's impact on living costs.
Costa Rica's employment rate stands at 52.2% in 2025, down slightly from 52.8% in 2024. The unemployment rate has increased to 7.5% from 6.9% the previous year, indicating some economic softening.
Average salaries nationally range from $1,000-$3,000 per month depending on the sector. In Guanacaste, major employment sectors including tourism and construction typically pay $650-800 per month for non-managerial roles.
A concerning trend has emerged where extreme poverty in Guanacaste has doubled since 2021, driven by rising living costs that have outpaced wage gains despite the real estate boom. This disparity highlights the disconnect between property markets and local economic conditions.
The income disparity creates a challenging environment for local buyers, explaining why the market relies heavily on foreign purchasers and why price corrections may continue until local affordability improves.
What government policies, taxes, or regulations are being introduced that could affect real estate prices in Guanacaste?
Costa Rica maintains several tax policies and investor incentives that directly impact real estate market dynamics in Guanacaste.
- Luxury Property Tax: Properties valued above $233,900 are subject to luxury tax rates of 0.25-0.55%, which can impact higher-end market segments.
- Property Tax Structure: Standard property tax rates of 0.25-0.55% with reassessments every five years help maintain government revenue while remaining relatively moderate compared to other markets.
- Rental Income Taxation: A 15% tax on 85% of rental income affects investment property returns but remains competitive regionally.
- Capital Gains and VAT Rules: New regulations apply to certain transactions, though specifics vary by transaction type and buyer residency status.
- Investment Incentives: Law 9996 provides significant tax breaks and exemptions for investments exceeding $150,000, plus temporary reductions in transfer taxes for qualifying buyers, supporting foreign investment.
These policies generally support continued foreign investment while generating revenue from luxury property ownership, creating a balanced approach that maintains market attractiveness.
What major infrastructure or tourism projects are planned in Guanacaste that could influence housing demand?
Several major infrastructure and tourism developments are underway in Guanacaste that will likely support long-term housing demand and property values.
Liberia Airport is undergoing significant enhancements, including expanded capacity and more direct international flights. These improvements will increase accessibility and reduce travel times for international visitors and residents.
The tourism sector is experiencing major expansion with at least nine significant hotel and resort projects scheduled for completion between 2025-2026. Notable developments include the Ritz-Carlton Reserve at Peninsula Papagayo and several other luxury resort complexes.
Infrastructure improvements include enhanced tourist police services, road improvements, and upgraded visitor amenities throughout key tourist hubs like Tamarindo, Nosara, and Flamingo.
These developments create secondary housing demand for construction workers, service employees, and support staff, while also enhancing the area's appeal to both tourists and potential residents.
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.
House prices in Guanacaste are unlikely to experience dramatic declines but may continue gradual corrections of 5-10% over the next 12-18 months as the market reaches equilibrium.
Current conditions favor buyers with increased inventory, frequent price reductions, and improved financing conditions, while infrastructure development and sustained foreign interest provide long-term market support.
It's something we develop in our Costa Rica property pack.
Sources
- The LatinVestor - Guanacaste Price Forecasts
- The LatinVestor - Housing Market Costa Rica
- Coldwell Banker - Guanacaste Investment Guide 2025
- Playa Lagarto Real Estate - Market Outlook 2025-2028
- Nearshore Americas - Property Price Analysis
- Ticos Land - Tourism Sector Expansion
- Coldwell Banker - Market Update August 2024
- Global Property Guide - Costa Rica Price History
- OSA Tropical Properties - Mid-Year 2025 Market Report
- CRIE - Average Home Prices Costa Rica
-Complete Guide to Buying Property in Guanacaste, Costa Rica
-Average Rental Yields in Guanacaste: Investment Analysis
-Property Taxes in Guanacaste: Complete Guide for Investors
-Why Are Guanacaste Properties More Expensive Than Other Regions?