There are probably many contemplating an expat move now wondering what will happen with COVID-19 and Costa Rica. I’ve written this post to provide you with the basic facts of the situation down here, as well as a few of my opinions on what this all means going forward…
COVID-19 and Costa Rica – first the facts…
FACT 1: As of March 21, 2020, there are 117 confirmed cases of COVID-19 and 2 deaths. 10 cases have been foreigners and 107 Costa Ricans. 1,190 cases have tested negative and there have been 2 full recoveries. The Ministry of Health is updating these statistics on a daily basis here.
FACT 2: Around 80% of the confirmed cases are in the greater metropolitan area (or GAM, which includes San Jose, Alajuela, Heredia and Cartago). That’s were the largest concentration of population is (around 1/2 of the almost 5 million country population). The areas with the highest concentration of confirmed cases within the GAM are San Jose, Alajuela and Escazu.
FACT 3: There are only 3 confirmed cases in Perez Zeledon. I believe all three are related to travel from abroad and there are no confirmed cases related to community spread.
FACT 4: Costa Rica has closed its borders to non-citizens and non-residents, at least until April 12. The government has also taken “social-distancing” measures, such as limiting the capacity of bars, restaurants, stores, etc. to 50% of normal capacity, closing beaches and national parks, and shutting down scheduled events where large numbers of people would gather.
FACT 5: The first confirmed case was recorded on March 6. Since then the number of cases has been doubling about every 3 days until the period March 20 to 21, when the increase was only 4 confirmed cases, from 113 to 117. It is certainly too early to say whether this indicates a flattening of the new cases curve.
See update video below…
COVID-19 and Costa Rica – my opinions…
OPINION 1: COVID-19 will be devastating for the tourism industry in Costa Rica, at least in the short-term. The government is going to have to step in and help. Tourism represents around 6 to 7% of Costa Rica’s GDP. For this reason, I would imagine the restriction on entry noted above will be lifted as soon as Costa Rica sees a stabilization in the trend of new confirmed cases. The shutting down of an entire industry so vital to Costa Rica’s economy won’t be sustainable, not even in the short-term.
OPINION 2: Real estate, especially the market with foreign buyers, will be negatively affected short-term, since it is impossible to sell properties to buyers when they have essentially been told they can’t come to the country. However, this is more than likely only a temporary situation, as noted above. While I don’t believe the travel restriction represents a long-term threat to the real estate market, the worldwide economic fallout from this pandemic certainly could. That is addressed in more detail below.
OPINION 3: The longer-term trend may be positive as foreign buyers in locations that have been, or are being, more dramatically impacted may look for a safe-haven from the storm. If Costa Rica does emerge from the health threat posed by COVID-19 relatively quickly, then it may well be seen as a safe haven by folks in other areas that aren’t as lucky.
Costa Rica has a few things going for it in this regard. While half the population is in an area of high density, the other half is widely dispersed throughout the countryside. There really are no large population centers outside the GAM. Perez Zeledon is perhaps the second largest and it only has about a 50,000 urban population, with the rest scattered in very small mountain pueblos. Also, Costa Rica has the advantage of being in an area that is generally not susceptible to flu-like viruses. While COVID-19 is certainly not a typical flu, it does seem to be much more prevalent in colder environs.
OPINION 4: A lot will depend on the economic situation in the States and worldwide. Many economists are calling for a depression the likes of which hasn’t been seen since before WWII (note that they said the same thing immediately after the 2008 crash). If something that devastating actually occurs and people simply don’t have the wherewithal to buy real estate in Costa Rica, then of course the market will suffer. This could come in the form of no activity, or a reduced level of activity moving towards less expensive properties. My personal opinion is that it is way too early to make such dire predictions.
This is an economic disaster caused by a health threat, as opposed to an underlying severe economic problem (as was the case in 2008). If the world is successful in stemming the still exponentially rising rate of infection, and/or if a viable vaccine becomes available, I believe economies around the world could bounce back relatively quickly.
OPINION 5: Measures must be taken by federal governments in the States and Canada to ameliorate a potentially disastrous situation. The political and economic fallout from all this could become unbearable for many people. The political division in the States is at levels never seen before, certainly not in my lifetime. Donald Trump’s handling of this disaster, so far, is only making it worse. On top of all that we have a national election looming.
The prospect of deeper division leading to social unrest (or even upheaval) is alarming and very possible. Before this whole COVID-19 shit hit the fan, we realtors were already seeing many of our clients make the move due to the political division and hostility. COVID-19 could very well be the straw that breaks the camel’s back so to speak. And this could bode well for Costa Rica real estate moving forward, as long as folks still have the economic ability to make a move. Sellers of Costa Rica properties may have to become far more flexible and creative in offering financing alternatives to all-cash deals.
I don’t claim to have any “crystal ball” and I’m sure many of my opinions on COVID-19 and Costa Rica will prove to be completely or partially wrong. But it’s what I’m thinking at the moment.
Hope it helps.
For some optimistic (& hopefully uplifting) thoughts on COVID-19, check out the links below…
Thanks for the vivid description and update of Costa Rica and was very helpful! Since I spent 8-10 years going back and forth with a love of the country and love of Tica I had always a soft spot for it and attempted twice to buy properties and become resident of CR but did not work out that time! Now it is very disappointing that I can not travel to Central America including Nicaragua and Costa Rica! Will try to make another move in the future and try to make a retirement home if I survive and Dios quiere! Thanks for your good work! Stay safe ! All I can say! It is shame that I can not do anything with this stupid virus being a physician.
Thanks for the kind words and do stay safe. I believe you’ll be able to visit before long…
Pura Vida!