The real estate market is influenced by the local and international economy, the construction sector, and the country’s governmental plans. We spoke with Melizandro Quirós, economist and executive director of CENFI, about the real estate market trends in Costa Rica for 2024, based on market studies conducted by CENFI, CFIA, and the INEC.
Costa Rica’s real estate market comparison data of 2023
The housing sector experienced a decline for the first time, because for years, its growth was sustained. For 2022, the number of square meters was 3,694,284; while in 2023, 3,412,993 were registered, with a decrease of -7.6%.
The commercial and industrial sectors in comparison, showed significant growth in the number of square meters with construction intent. In 2023, the number of renovations and extensions increased by 13.2% and 46.7% respectively, counterbalancing the decrease in new construction, which was -4.3%.
So what are the trends for the real estate market in Costa Rica 2024?
New construction, extension works and remodelling
In 2023 there was a slowdown in new construction. The other two components, however, have grown and are expected to continue this trend in 2024. Construction work is projected to grow by 2.5% this year, according to CFIA data.
Existing assets are being used to the fullest and more and more people are deciding to expand or re-signify spaces without exploring investment elsewhere. This is a very flexible and secure way to enter the Costa Rican real estate market. However, local markets directly influence the success of these types of investments.
The Growth of Free Trade Zones in Costa Rica
Alajuela, Cartago and Grecia are the 3 cantons that concentrate 60% of the construction intention for 2024. This is explained by the influence of the Free Trade Zones. 25% of the companies that arrived from abroad in 2023 were located outside the GAM. This has allowed markets outside the Greater Metropolitan Area to prepare for a more dynamic economy in 2024.
Other areas such as Guanacaste and the Central Pacific are generating a lot of synergy with investment opportunities in hotel and commercial properties.
The strength of the investment will depend on factors such as price per square meter, job creation, accessibility, human capital, among others.
What types of construction are going to be trending in the Costa Rica real estate market 2024?
In 2023, rental housing increased by 5.4% according to INEC data. This is an incentive to build homes or buy properties exclusively to rent out in 2024.
Common housing developments are going to have a downward trend, while other markets such as commercial and industrial are trending upwards.
The data shows that construction projects for 2024 are heading towards expansion and remodeling. The commercial real estate market is adapting. The business expectation for 2024 is to take advantage of existing spaces and adapt them to new needs. This has meant an increase of 12% in new projects and almost 20% of current works under remodeling.
On the other hand, the industrial market is experiencing new investment, leading the real estate sector with more than 33% growth projected for this year. This has a positive effect since the industrial market requires investment in labour, generates housing needs and activates local commerce in general.
