Relevant Information
Last updated Friday, July 13, 2007
Foreign Investment in Local Property Trebles
Central Bank Points To First Quarter in Puntarenas and Guanacaste
Foreign investment in Costa Rica’s real estate industry has nearly tripled in the past 12 months, according to Costa Rica’s Central Bank.
By the bank’s estimate, mostly US investors and homebuyers bought at least $192 million worth of property in the first three months of this year, largely in the provinces of Guanacaste and Puntarenas. That compares to $70 million during the same period in 2006.
The estimate excludes purchases of hotels, tourism businesses and deals worth less than $100,000, and is recognized to be likely short of the real figure.
“Certainly, as the recent Central Bank study shows, an important factor in the increment of foreign investment in the last months has been real estate development and property acquisition by foreigners,” said the Minister of the Presidency, Rodrigo Arias.
“Much of this development is related to the tourism industry, precisely one of the engines of the country’s economy.”
In fact, real estate prices up and down the Pacific coast have risen over the last year, as Guanacaste’s market matures and the Central Pacific looks to be entering its own boom.
Real Estate agents up and down the coast told The Beach Times this week the bank’s figures measure up to what they’re seeing in their areas, where business continues to be good with both price and demand rising.
Development is also becoming more high-end, they concurred, with more sophisticated and environmentally conscious developers and buyers following the path beaten years earlier by The Four Seasons Hotel, on the Papagayo Peninsula.
In the Central Pacific sales are booming, as condominium projects go up rapidly along the coast. Many investors are looking further toward the horizon, however, in expectation of high-end, name-brand projects like those that have drawn so much press further north.
In Guanacaste, the high-volume land purchasing of past years has given way to concentrated development, as much of the valuable beachfront and ocean view property has been bought up and many of the projects that were sold under pre-construction deals are now under way.
Some 20 high-end hotels are currently being planned or built for Guanacaste’s northern coast, which would add hundreds of rooms to the area’s offerings and represent hundreds of millions of dollars in investment.
Mario Solano, an economist with the Central Bank who worked on the property investment estimate, said that, though tourism investment figures for 2007 are not yet available, it nearly tripled between 2005 and 2006. He expects this year’s growth to be “a little more than that,” which is a factor pushing real estate investment.
“We see a relationship between the two. The Hyatt comes out promoting people to come stay at its hotel, and a lot of people are going to be interested in buying property in that area."
Real Estate Investing
Investing in real estate in Costa Rica, particularly in Guanacaste, can be a good decision. Our northern Pacific coast attracts more and more foreigners every year while luxurious leisure residences, condominiums, flats or villas are being sold even before they are built.
Investing in real estate in Costa Rica, particularly in Guanacaste, can be a good decision. Our northern Pacific coast attracts more and more foreigners every year while luxurious leisure residences, condominiums, flats or villas are being sold even before they are built.
Where not so long ago stood small and isolated fishermen towns, now stand commercial centers, office buildings, modern condominiums and suites, five star hotels and dream houses of the highest standing and architectural styles.
These real estate developments, however, are not exempt from tricky legal obstacles and bureaucratic ambushes, which you have to be conscious of when entering the real estate game in our rich coast. Whether you are an investor with a big project in mind, or the average guy wishing to own your little piece of paradise, the following lines are intended to give you a few clues on what “dangers” lay ahead, and how to sort them out.
But a word of advice: leave behind the I-can-do-it-myself attitude. It’s important to be aware just how different things can be in a foreign country, with its own mentality, language and legal system. For instance, foreigners wishing to buy real estate here commonly ask about ownership title in the sense of a transferable certificate, and our system of Public Registry and notarized deeds is completely unknown to many North Americans.
This means you’re going to need some support, someone to guide you through the process of achieving your dream. Contrary to some northern jurisdictions, going to the lawyer is not the last step in the process, but should be one of the very first. A legal expert in particular can be very helpful in deciding even the simplest matters of what exactly you want to buy or build.
Legal advice must be tailor-made since everyone has something different in mind. However, in the early stages what is needed is referred to as performing ‘due diligence’ with respect to a property, or a projected purchase-development transaction.
In general terms, due diligence covers “the process of research and analysis that takes place in advance of an investment”. When used in reference to real estate, the idea is to have a professional check the target land for any legal problems it may have, identifying issues in all possible aspects, and finally allowing you to count on having all the information available to understand the potential risks involved in the investment, through the final recommendation the lawyer will put forward to you.
Due diligence will necessarily include a thorough registry search (informe registral), which shows the owner of the property, the nature of the land, any legal encumbrances or liens attached to the piece of land, pending claims or ongoing judicial proceedings where the land is disputed, etc. It will also indicate whether the land you are buying has any building limitations. As well, if the property is owned by a company — which is very frequently the case here in Costa Rica — it is necessary to perform a search on the company, to make sure the “seller” has sufficient power to do so on behalf of the company.
If the property is registered land, then all the information will be available at the National Public Registry, but it could also be the case that the offered estate is untitled land, in which case the risks of buying are increased.
Another scenario, less advisable, involves acquiring “permission or occupation right” instead of real ownership. This is consistently the case with most beachfront properties. These inaccurately-named “properties” may in fact not be owned by anyone, as they remain Public or State Property if they lay within 200 meters into the land from the high-tide mark, known as the Maritime Zone. In such cases, due diligence studies must include research as to the municipal concession file on such “occupied” land.
Due diligence must also look into the tax records of the competent body to check for any problems of unpaid taxes, etc. And, if developing a more complex project, such as condominium units, other municipal permits, authorizations, applications must be previously obtained before actually building.
Due diligence, when performed by a competent professional, must absolutely also check on possible environmental restrictions which could seriously compromise your project. For instance, you will need special permits to cut down trees, or to alter a water source, and eventually will require a specific environmental permit which is granted by our Environmental Agency, SETENA, upon completion of a series of administrative formalities.
There are still many other variables and details that would need to be reviewed by the attorney performing due diligence for your specific case. Only through a professionally- conducted due diligence would you be capable of knowing what you are buying and if it is worth going for.
Arias Brings CAFTA Debate To Guanacaste
Cabinet Celebrates Annexation With A Clear Message
The Oscar Arias political machine rolled into Guanacaste this week, behaving more like a government looking for re-election, rather than one just 14 months into a four-year-term.
First and briefly in Nicoya, and then for much of the day in Liberia, President Arias and his cabinet unleashed a charm offensive, shaking hands, hugging and back-slapping and one by one reminding an invited crowd of precisely what they had achieved in their first year together.
Certificates of housing were given out, awards bestowed on athletes, musicians and philanthropists, achievements recognized, and dozens of speeches given.
Even with a misstep, as clearly the decision to move Annexation Day celebrations from Nicoya to Liberia was, President Arias has the political savvy to recover quickly.
Yet, in a sense, this is a government fighting an election, or at least a popularity contest.
Voters will go to the polls in October, in a referendum to decide whether or not they want any part of the Central American Free Trade Agreement, better known here by its Spanish acronym, TLC.
MOPT Deals Bring Road Works Forward
The Ministry of Public Works and Transport is using the private sector to help them bring forward a handful of key road projects across Guanacaste.
The Vice-Minister of Public Works, Pedro Castro, confirmed this week his department was working with private businesses and organizations to get around the lengthy process naming contractors for heavy engineering.
“The ministry has problems with administrative contracting, which is a whole process that must be followed and often slows the projects down,” Mr Castro acknowledged late this week.
“With the help of private businesses, which are not subject to administrative contracting, everything is easier,” he added.
“And another positive aspect is that undoubtedly we have a limited budget to do everything we want to do,” he said. “For example, if we have a budget of $100,000 for a design, we can’t do projects that cost $5 million.”
The most visible cooperation is between the Ministry and the Guanacaste Chamber of Tourism, who together will seal the road from 27 Abril, to Villareal, near Tamarindo.
The chamber is just $10,000 short of the $120,000 it needs to commission a survey and plan of the roadway which would then be approved by the Ministry. In return the ministry will budget for the road works in the first weeks of 2008. Originally they had not intended to start work until 2009.
Central Bank Points To First Quarter in Puntarenas and Guanacaste
Foreign investment in Costa Rica’s real estate industry has nearly tripled in the past 12 months, according to Costa Rica’s Central Bank.
By the bank’s estimate, mostly US investors and homebuyers bought at least $192 million worth of property in the first three months of this year, largely in the provinces of Guanacaste and Puntarenas. That compares to $70 million during the same period in 2006.
The estimate excludes purchases of hotels, tourism businesses and deals worth less than $100,000, and is recognized to be likely short of the real figure.
“Certainly, as the recent Central Bank study shows, an important factor in the increment of foreign investment in the last months has been real estate development and property acquisition by foreigners,” said the Minister of the Presidency, Rodrigo Arias.
“Much of this development is related to the tourism industry, precisely one of the engines of the country’s economy.”
In fact, real estate prices up and down the Pacific coast have risen over the last year, as Guanacaste’s market matures and the Central Pacific looks to be entering its own boom.
Real Estate agents up and down the coast told The Beach Times this week the bank’s figures measure up to what they’re seeing in their areas, where business continues to be good with both price and demand rising.
Development is also becoming more high-end, they concurred, with more sophisticated and environmentally conscious developers and buyers following the path beaten years earlier by The Four Seasons Hotel, on the Papagayo Peninsula.
In the Central Pacific sales are booming, as condominium projects go up rapidly along the coast. Many investors are looking further toward the horizon, however, in expectation of high-end, name-brand projects like those that have drawn so much press further north.
In Guanacaste, the high-volume land purchasing of past years has given way to concentrated development, as much of the valuable beachfront and ocean view property has been bought up and many of the projects that were sold under pre-construction deals are now under way.
Some 20 high-end hotels are currently being planned or built for Guanacaste’s northern coast, which would add hundreds of rooms to the area’s offerings and represent hundreds of millions of dollars in investment.
Mario Solano, an economist with the Central Bank who worked on the property investment estimate, said that, though tourism investment figures for 2007 are not yet available, it nearly tripled between 2005 and 2006. He expects this year’s growth to be “a little more than that,” which is a factor pushing real estate investment.
“We see a relationship between the two. The Hyatt comes out promoting people to come stay at its hotel, and a lot of people are going to be interested in buying property in that area."
Real Estate Investing
Investing in real estate in Costa Rica, particularly in Guanacaste, can be a good decision. Our northern Pacific coast attracts more and more foreigners every year while luxurious leisure residences, condominiums, flats or villas are being sold even before they are built.
Investing in real estate in Costa Rica, particularly in Guanacaste, can be a good decision. Our northern Pacific coast attracts more and more foreigners every year while luxurious leisure residences, condominiums, flats or villas are being sold even before they are built.
Where not so long ago stood small and isolated fishermen towns, now stand commercial centers, office buildings, modern condominiums and suites, five star hotels and dream houses of the highest standing and architectural styles.
These real estate developments, however, are not exempt from tricky legal obstacles and bureaucratic ambushes, which you have to be conscious of when entering the real estate game in our rich coast. Whether you are an investor with a big project in mind, or the average guy wishing to own your little piece of paradise, the following lines are intended to give you a few clues on what “dangers” lay ahead, and how to sort them out.
But a word of advice: leave behind the I-can-do-it-myself attitude. It’s important to be aware just how different things can be in a foreign country, with its own mentality, language and legal system. For instance, foreigners wishing to buy real estate here commonly ask about ownership title in the sense of a transferable certificate, and our system of Public Registry and notarized deeds is completely unknown to many North Americans.
This means you’re going to need some support, someone to guide you through the process of achieving your dream. Contrary to some northern jurisdictions, going to the lawyer is not the last step in the process, but should be one of the very first. A legal expert in particular can be very helpful in deciding even the simplest matters of what exactly you want to buy or build.
Legal advice must be tailor-made since everyone has something different in mind. However, in the early stages what is needed is referred to as performing ‘due diligence’ with respect to a property, or a projected purchase-development transaction.
In general terms, due diligence covers “the process of research and analysis that takes place in advance of an investment”. When used in reference to real estate, the idea is to have a professional check the target land for any legal problems it may have, identifying issues in all possible aspects, and finally allowing you to count on having all the information available to understand the potential risks involved in the investment, through the final recommendation the lawyer will put forward to you.
Due diligence will necessarily include a thorough registry search (informe registral), which shows the owner of the property, the nature of the land, any legal encumbrances or liens attached to the piece of land, pending claims or ongoing judicial proceedings where the land is disputed, etc. It will also indicate whether the land you are buying has any building limitations. As well, if the property is owned by a company — which is very frequently the case here in Costa Rica — it is necessary to perform a search on the company, to make sure the “seller” has sufficient power to do so on behalf of the company.
If the property is registered land, then all the information will be available at the National Public Registry, but it could also be the case that the offered estate is untitled land, in which case the risks of buying are increased.
Another scenario, less advisable, involves acquiring “permission or occupation right” instead of real ownership. This is consistently the case with most beachfront properties. These inaccurately-named “properties” may in fact not be owned by anyone, as they remain Public or State Property if they lay within 200 meters into the land from the high-tide mark, known as the Maritime Zone. In such cases, due diligence studies must include research as to the municipal concession file on such “occupied” land.
Due diligence must also look into the tax records of the competent body to check for any problems of unpaid taxes, etc. And, if developing a more complex project, such as condominium units, other municipal permits, authorizations, applications must be previously obtained before actually building.
Due diligence, when performed by a competent professional, must absolutely also check on possible environmental restrictions which could seriously compromise your project. For instance, you will need special permits to cut down trees, or to alter a water source, and eventually will require a specific environmental permit which is granted by our Environmental Agency, SETENA, upon completion of a series of administrative formalities.
There are still many other variables and details that would need to be reviewed by the attorney performing due diligence for your specific case. Only through a professionally- conducted due diligence would you be capable of knowing what you are buying and if it is worth going for.
Arias Brings CAFTA Debate To Guanacaste
Cabinet Celebrates Annexation With A Clear Message
The Oscar Arias political machine rolled into Guanacaste this week, behaving more like a government looking for re-election, rather than one just 14 months into a four-year-term.
First and briefly in Nicoya, and then for much of the day in Liberia, President Arias and his cabinet unleashed a charm offensive, shaking hands, hugging and back-slapping and one by one reminding an invited crowd of precisely what they had achieved in their first year together.
Certificates of housing were given out, awards bestowed on athletes, musicians and philanthropists, achievements recognized, and dozens of speeches given.
Even with a misstep, as clearly the decision to move Annexation Day celebrations from Nicoya to Liberia was, President Arias has the political savvy to recover quickly.
Yet, in a sense, this is a government fighting an election, or at least a popularity contest.
Voters will go to the polls in October, in a referendum to decide whether or not they want any part of the Central American Free Trade Agreement, better known here by its Spanish acronym, TLC.
MOPT Deals Bring Road Works Forward
The Ministry of Public Works and Transport is using the private sector to help them bring forward a handful of key road projects across Guanacaste.
The Vice-Minister of Public Works, Pedro Castro, confirmed this week his department was working with private businesses and organizations to get around the lengthy process naming contractors for heavy engineering.
“The ministry has problems with administrative contracting, which is a whole process that must be followed and often slows the projects down,” Mr Castro acknowledged late this week.
“With the help of private businesses, which are not subject to administrative contracting, everything is easier,” he added.
“And another positive aspect is that undoubtedly we have a limited budget to do everything we want to do,” he said. “For example, if we have a budget of $100,000 for a design, we can’t do projects that cost $5 million.”
The most visible cooperation is between the Ministry and the Guanacaste Chamber of Tourism, who together will seal the road from 27 Abril, to Villareal, near Tamarindo.
The chamber is just $10,000 short of the $120,000 it needs to commission a survey and plan of the roadway which would then be approved by the Ministry. In return the ministry will budget for the road works in the first weeks of 2008. Originally they had not intended to start work until 2009.
Costa Rica news archive - 2007: | January | February | March | April | May | June | July | August | September | October
