A while back I published a post on why the growth story is compelling for the Costa Rica southern zone. This post will dig a little deeper into that topic.
According to well-known authorities (meaning, well, me) the southern zone real estate market is divided into three areas: mountains, beaches and the Osa Peninsula. Together they comprise the most untapped major area for growth in Costa Rica, for reasons stated in the above mentioned article.
I’m not going to get into the growth prospects for the Osa Peninsula in this post. I’ll only say that this area, which is “off-the-beaten-path” in every sense of the word, will be slow growing. And that’s primarily because the choice parts of it are highly protected as either national park (as in Corcovado) or some other form, such as private reserve or wildlife refuge. And that’s exactly how it should be since this in the most biologically diverse area of the country and indeed of the entire planet.
Therefore, the areas of focus will be Costa Rica southern zone mountains and beaches. When I refer to “mountains” I am speaking of the Talamancas that tower over the city of San Isidro de El General, which is the second largest city in the country, outside of the metropolitan area of the central valley, known as the GAM. When I refer to “beaches” I am speaking of the renowned area of Costa Rica coastline known as the Costa Ballena, which consists of the well-known beaches of Dominical, Uvita and Ojochal
There is an in-between area, which consists of the coastal range the sits between the valley where San Isidro is located and the coast. This smaller range features communities such as Platanillo and Tinamastes, which have been increasing in popularity and for good reason. Here you can be in the mountains and still have ocean view, not to mention spectacular waterfalls, flora and fauna! For the purposes of this article I will consider this area to be “mountains” as well.
So where is growth going in the Costa Rica southern zone? I believe the answer to that has to be “mountains” for the reasons I will lay out below…
Inventory is Thinning Out at the Beach – A common complaint I am hearing from the hard-core “beach agents” at our weekly Coldwell Banker team meeting is that inventory is getting thin. The beach market has been booming as of late and the 120+ agents down there have been enjoying good times. However, they are fast getting to the point where the “good stuff” has all been recently sold. I sort of had an inkling some time ago that this was going to happen. Will there be new product coming onto the market to fill in the gaps? Yes and No. Sure there’s always going to be some new projects and construction going on, especially when there’s demand for it and there definitely is demand. However, if you read further you’ll see that the Costa Rica government is not all that keen on seeing a lot of real estate development in the southern zone beaches.
The mountain market has lagged behind the beach one. The market here is different. You’ll not find too many million dollar homes up here. First, because it’s primarily a tico market and ticos by and large don’t have the money to build those sorts of homes, nor do they really have any desire to. Secondly, the expats who have built up here tend to be a more humble lot than those you’ll find at the beach. Many are fully content with a tico-style home surrounded by several acres that can become their personal natural playground. Prices are still affordable enough up here in the mountains to make that entirely possible for the average joe expat.
Prices are Getting Higher at the Beach – The strong market demand for ocean view homes and lots at the beach is naturally pushing up prices. And as inventories thin out that will only accelerate. Hey, that’s good old supply and demand, right?
On the other hand, prices in the mountains are low and haven’t seen that much movement, yet. I believe as more expats understand that they can get much more property for their money up here in the mountains, with a better climate and still be less than an hour from the beach, more will forego the ocean view for a breathtaking mountain one.
There’s a Development Crackdown Going On at the Beach – Our southern zone is blessed in many ways and one of those is that we have abundant water. Costa Rica law requires a legal source of water to be in place prior to the issuance of a permit to construct. However, the municipality that controls permits along the Costa Ballena has for past years seen fit to look the other way and issue permits without a legal source established, as long as you could show evidence that one was readily obtainable. That practice has recently stopped dead in its tracks. The municipality is now absolutely and without exception requiring a legal water source to be “in-place” prior to any issuance of building permits for all new construction along the Costa Ballena. So what, you ask? Well, the so-what is that much of that gorgeous ocean view land in the mountains that overlook the Costa Ballena does NOT have a legal source. Is there water? Sure there’s plenty of it, but access to it is not necessarily legal, or to use Costa Rica legalese, it’s not “concessioned.” Here’s a link to an article that explains all that in greater detail.
Why has the municipality all of a sudden gotten so strict? The logical reason is that they want to put the brakes on and control the Costa Rica southern zone beach development. They do not want to see happen here what happened back in the early 2000’s in Guanacaste. That’s a good thing from an environmentalist perspective. It also bodes well for growth in the mountains. Here’s an article where the Costa Rica government recently won a hard-fought case in international arbitration against a developer on the central Pacific coast.
The mountains around San Isidro simply have more infrastructure in place than those overlooking the coast. Chances are if you’re buying in the mountains you already have a legal water source from the community Asada or the AyA, which is basically, city water. And even if you have to get a concession from a spring, creek or dig a well, you won’t face the anti-development hostility that developers are facing along the coast.
San Isidro de El General is Destined to be a Major Costa Rica City – I already mentioned that it’s the second largest outside the GAM. And it is getting bigger and better all the time. I’ve lived in the mountain pueblo known as Quebradas for several years now and I can attest to the growth in new stores and restaurants that seem to open every week in and around the city. And there’s talk of expanding our airport to make it available for international flights. I believe that as San Isidro comes of age, people will begin more and more to take notice of the opportunity in the mountains of the Costa Rica southern zone. Heck, we’ve already got the best 5-star resort in Central America in the mountains just 30 minutes out of town, the Hacienda AltaGracia. Also there are major developments already underway, such as that of the sustainable community, Rise Costa Rica, and the new retreat center, Synergida.
Taking all that into account, I believe the handwriting is on the wall that the place where growth is going in the Costa Rica southern zone in the foreseeable future is without a doubt, mountains.
The good news is that in the Costa Rica southern zone you can live in the highest mountains the country boasts, with a near perfect climate and easy access to a major and beautiful city, and still be less than an hour from the beach!
To explore both beach and mountain real estate opportunities, click here.