How to Reactivate Residential Construction?

Offering more amenities in residential complexes and maintaining the discounts offered in housing fairs for longer are some of the strategies applied by real estate developers in Costa Rica to increase sales of new homes.

Monday, October 7, 2019

According to the most recent figures from the National Institute of Statistics and Censuses (INEC), between the first half of 2018 and the same period in 2019 the number of houses built in Costa Rica fell by 11% from 10,753 to 9,620.

See CentralAmericaData's "Real Estate Project Feasibility Studies"

Regarding the constructed area, the report states that for the periods in question it decreased by 12%, going from 953,450 to 823,679 square meters. See full report.

Businessmen in the sector believe this fall is because of economic uncertainty among consumers in the country, which has influenced the decisions of families regarding the purchase of a new home.

Justin Stein, manager of the firm Inmoinfo, told that "... developers stopped new projects waiting for economic conditions to clear up or improve. We are currently tracking more than 5,500 vertical apartment units for which development is suspended. This number has doubled since 2017."

See "Big Data and Real Estate Market” and "Residential Construction: $2 billion in New Projects

Ricardo Tapia, economic advisor to the Costa Rican Chamber of Construction (CCC), explained that "... the sector shows a declining behavior in the face of the high dynamism of the national economy and the drop in the level of confidence of consumers and businessmen. The housing sector is the most important in the generation of economic activity in construction, undoubtedly it is vital to reactivate the development of housing."

In this context, the real estate agencies in charge of residential projects have decided to offer better conditions to increase home sales, among which are discounts on prices, a wider range of finishes and provide more amenities in the condominiums, such as swimming pool, fitness center, green areas, playgrounds, among others.

Regarding construction throughout the region, CentralAmericaData reported that in the first half of 2019, 178 environmental impact studies were presented to develop condominiums, apartment buildings and other housing projects in Central American countries, which together add up to an estimated investment of $2 billion.

See articles from Nació "Fall in housing construction weakens the construction sector" and "Real estate apply discounts and offer more services in housing projects” (in Spanish).

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