The demand for housing solutions and commercial spaces in downtown San Jose has led the cost of land per square meter to rise to $1,200.
Nacion.com reports: "Mata Redonda, Merced, Catedral, Hospital and El Carmen have in the last three years represented half of the total square meters (sqm) for which there are applications for building permits. In this area, construction of houses and stores has the most dynamism ... ".
During the first three months of 2013 the real estate market in Costa Rica received $377 million from the sale of properties and construction projects of foreign capital.
This amount represents 90% of the total resources directed towards this sector during 2012. In that period the country had revenues of $866 million in foreign direct investment, an increase of 41% compared to the same period last year.
The high prices of properties being recorded in parts of the country are scaring away foreign investment and limiting the recovery of those most affected by the 2008 crisis.
The question posed by foreign investors to Realtors: "'Why invest in Costa Rica when the price of the property is the same or higher as in New York but with less quality services?", is proof that the real estate bubble remains as active as before the crisis of 2008.
As by explained Aleyda Bonilla, director of the Chamber, the indicator will combine information from the public registry, municipalities and inspectors and will initially serve to determine the cost of lots and then, in a second stage, will be used to list houses.
Only three of the 70 properties offered were sold in the first digital auction organized by the Costa Rican Chamber of Real Estate.
The properties include lots, houses, condos, apartments and unfinished developments which form part of Banco Nacional de Costa Rica’s assets, repossessed from customers who defaulted on their loans.
Between September 13 and 21, Banco Nacional will auction 70 properties on the Internet.
The platform for electronic auction - www.subasta-cccbr.com was presented by the Costa Rican Chamber of Real Estate and Banco Nacional.
Chévez Diego, director of Banco Nacional 's assets told Nacion.com, "The auction goes online today (12 September) worldwide, the first properties we have for investors will appear here. They will come up for auction with prices discounted up to 50%. "
Eleven new vertical projects will see the light over the next two years in the Greater Metropolitan Area.
Aimed at the middle and upper classes, most developments are to the west of San Jose.
Among the projects, one that has already been started is Paseo Colón Torres, in which $28.6 million has been invested and will be finished next year.
El Financiero reported statements by Rosendo Pujol, director of the Research Program on Sustainable Urban Development at the University of Costa Rica (PRODUS in Spanish), concerning the reasons for this boom, which he said were "... insecurity, growing congestion on roads and significant increases in the income of a minority. "
Reductions of up to 40% on prices reflect the bubble that was created in Costa Rican real estate sector.
The economic crisis that struck the U.S. and Costa Rica also had a great impact on the Costa Rican real estate industry, where demand has fallen to levels never seen before.
However, the crisis is not solely to blame for the current situation being experienced by the industry, which began two years ago.
In the province of Guanacaste, many real estate properties are being offered at much higher prices than their market value, in stark contrast with the sector’s depressed reality.
Attempting to put a stop to this practice, the Costa Rican Realtors Chamber (CCBR) has issued new internal regulations among its associates.
According to them, realtors must now sign a sale authorization agreement with the owner of the offered lot.
The development boom experienced by this tourism province in Costa Rica before the financial crisis has been replaced by “deceleration and prudence”.
“Imagine a car in a six-lane road travelling at 120 kilometers per hour. Suddenly, if finds itself in a gravel road, full of street holes, and the car must slow down to 20 kilometers per hour if it intends to stay apiece”.
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