Could Costa Rica become the new Spain?

Country:  Costa Rica

13 February 2008

Costa Rica’s property market could emerge as somewhat of a hotspot, according to one market expert.

Liam Bailey of David Stanley Redfern recently named Costa Rica, which is reportedly attracting a growing number of tourists, in his top ten property investment destinations. He claims that the country is a “contender to become as popular and as successful for property investors as Spain is and has been respectively.”

Costa Rica is one of the most secure and stable of all the Central American countries, according to Bailey. The country recently signed the Central America Free Trade Agreement (CAFTA), which should ensure that it enjoys sustainable growth across a variety of sectors, including the property industry. Strong foreign direct investment (FDI) and Gross Domestic Product (GDP) growth should also benefit the property market.

Bailey comments: “Properties in Costa Rica can easily rival Spain, much in the same way that the Caribbean resorts already do, but they are out of most people's price ranges. Costa Rica's emerging state means living costs are low so it provides an excellent low-cost Caribbean holiday. Consequently rental yields of at least 10 to 12% are typically achievable.

“The country has both a Caribbean and Pacific coastline, which not only gives it fantastic beaches, but also allows visitors and property investors a choice of climate: humid heat or dry heat - it is cool in the centre.