This entry is part 1 of 1 in the series Understanding Costa Rica Real Estate

Costa Rica History in knife metaphorI’d say that about 1/10th of my time spent with people looking to buy property in Costa Rica’s Southern Pacific zone is spent in the actual buying/selling of property. The other 9/10ths is a mix of conversations regarding what’s involved with living here, as well as discussing the business of real estate in Costa Rica.

At its core, the lack of an actual MLS (Multiple Listing Service) colors all aspects of the business here, and I’ll go into that later on in this series. To really understand the business of real estate here, I have found it helpful to go back in time and see the progression of events up to the present. This helps to not only understand the current market but also, to project what is to come.

Early days:
I got into real estate in Dominical in 2004. It felt like the day I got into real estate was the day that someone threw the on-off switch on the market. Since then I’ve heard some tales indicating that the market was already simmering and poised to boil.

I made a sale on my first day in the business. A $60,000 gorgeous ocean view property sized at around 2 acres.  The property featured Uvita’s Whales Tail front and center. That property has gone on to have a lovely home, guest house and pool built on it. It has been re-sold and enjoys a stellar vacation rental history (link to rental page on HomeAway)

Quick overview of The Zone:
The Zone is made up of a string of 3 towns with Dominical at its northern end. The northern boundary is not a hard line but is decidedly fuzzy, easily extending up to Hatillo and at times, up to Portalon. (link to Hills of Portalon Development).

From Dominical heading south on the coastal highway you get to Uvita and then further south, to Ojochal. The area between Dominical and Uvita has a nicely laid out mountain range that runs very parallel to the ocean. Hence the handle “coastal mountain range” This means that you can travel inland from the beach just a short way and get to elevation where it is breezy and cool and offers expansive views of the ocean and coastline, attributes which make this area extremely desirable to investors, relocators and migrators (part-of-the-year residents).

More History:
Before the incoming press of foreign interest in The Zone, the Ticos (Costa Ricans) owned all the land, and their land holdings were always in the multi-hectares (1 hectare = 2.48 acres. Think 2.5 to make it easy).

There was a time in the not too distant past when land in Costa Rica was nearly value-less. There were land-grant programs whereby a man simply had to be willing to take responsibility for a property and the government would “grant” him the land, with conditions.

At that time it was not known that “nature” had a lucrative aspect to it. Instead nature was largely viewed as “in the way” and needed to be tamed, subdued or eliminated. So, one of the conditions to receiving a land grant was to cut the trees down and raise cattle.

I suspect that this era may have coincided with the “McDonalds” explosion. This is an arguable point, so let’s just say it coincided with an extreme demand in the U. S. (and world) for beef.

After some time of cutting down enormous canopy trees and attempting to raise cattle in former rain-forest environs, there was a shift in our world’s appetites; nature became an important commodity. Granted, beef has continued to be an active commodity, but it was also learned that former rain forest land doesn’t necessarily make for the best pasture land.

Raising cattle in Costa Rica was a daunting struggle. The farmers found themselves up against nature. Having to maintain former rain forest jungle land in “pasture” condition presented its trials, as well as the fact that the beef business (exporting meat, bureaucratic inefficiencies, and 3rd world infrastructure or lack thereof) made a guy scratch his head and wonder if having all this land was such a good idea.

The Tico culture was/is multi-generational. These large, granted tracts of land, would end up being populated by the man who acquired the land, his now grown sons & daughters and their families, and the grand kids (soon to also have families.)

So despite having lots of land, a condition that in first-world countries equates to being wealthy, these farmers were subsistence. They lived off of what their land produced. As a child would grow to adulthood, Abuelo (abuelo = grandfather) would simply build them a house and apportion off some land (or not) and they would continue on contributing to the sustenance of the family. The land itself was not thought of in lucrative terms.

Abuelo just happened to acquire a land grant on, let’s say, 60 hectares of land that reaches from the inland side of the maritime zone on the coast up to the highest point of the coastal mountain ridge. He’s not thinking “oh boy! I’ve got some ocean view land here.” No, he’s thinking: “man I hope this land is fertile.”

Enter foreigner:
One day Bob, a tourist, is exploring the area and decides that he’d like to buy Abuelo’s property. Bob offers Abuelo $60,000 for the land. Abuelo has never even considered the remote possibility of maybe someday having such a sum. In fact, he’s never even seen that much money. He talks it over with his family and they (very understandably) feel that this would be a wonderful thing for them to do. So, they sell their land.

Bos is a visionary. He sees what is likely coming and so he stakes his early claim. Now, keep in mind that there is no electricity to this property, the access is horseback and the water is from a nearby spring that is bubbling out of the ground. Abuelo has run a pipe from the spring to an elevated storage tank near the family homes. Bob’s a visionary in that – what foreigner in their right mind would possibly want such a remote and forbidding piece of land?

To understand this is to understand the element that is credited with making the world go round. We all have different likes and dislikes. I wonder at the likes of Steve Jobs, Bill Gates and Paul Allen’s level of focus on the personal home computing idea at the time that they had that focus. I’m not of this ilk and so my hat is off to such ones. I view the early investors here in The Zone as being made of the same stuff.

In looking back over the history of the first wave of investors here, I marvel at their foresight. My then wife and I looked at some Whales Tail view property in Uvita around 2002 and, despite its being gorgeous and nicely priced, I felt that it was simply too remote. This was in the same area where 2 years later I sold my first property.

Ok, so I said that to understand the real estate market here in Costa Rica, it helps one to know a bit of the history. Granted, we’ve gone back to what I appropriately call the first-wave of intrepid and visionary investors – The Visionaries. We’ll continue on in the next article with Bob’s next steps and incredible gains on his visionary act.

New International Airport In Costa Rica Aims For “Green” Status 1

The strongest principle of growth lies in the human choice.   – George Eliot

Now that the Costanera Sur (Coastal Highway) has been completed, the new international airport for the southern Pacific zone is the single, most popular, regional question we receive. Most investors want it. Most environmentalists are alarmed by the thought of it. But, everybody wants to know how it is progressing and when/if it will be built.


Can money and a safe environment co-exist?

As per a recent report in the July edition of Enlace, a small local newspaper here in the southern Pacific zone, the Costa Rican government just concluded a meeting to determine the future of the International Airport in the area.  They also discussed how this airport would also be the 1st “green” airport in Latin America.

Another Airport Article?

I’m skeptical when I see news articles for the new International Airport in the Sierpe/Palmar area.  There has been talk of building this airport since I moved here in 2006.  Although Costa Rica has developed by leaps and bounds over the last 10-15 years, slow progress is the custom here.  The difference with this recent announcement is that the OACI (Organización de Aviación Civil Internacional), in conjunction with investors and local government groups, has selected two companies to complete a comprehensive impact study.   With this study in hand, the project should be able to make a case for construction.

The two independent groups are Acciona IngenierÍa, a company from Spain, and a Costa Rican environmental consultants Inforest Consultores Ambientales.  I couldn’t find any press releases on their respective websites, but according to the Enclace article the studies will include geological, hydro, archeological and aviary analysis.  The aviary report, which includes the migratory patterns of various bird groups native to the Osa Peninsula and beyond, is expected to be completed in 14 months while the other findings are expected to be completed in nine. They will also research the expected socio-economic impact for the region, and as I wrote in my 2010 article, a number of hotels will need to be built on the Costa Ballena in order to accommodate 300+ new arrivals per day.  With a price tag of $998,300, I imagine the government is confident it will receive a positive result.

Building It “Green”

I didn’t even know a “green airport” was possible until I started reading up on it.  England, the U.S., India, and Switzerland are just a few countries that have either achieved “green” certification or are adopting sustainable energy systems and transportation, and use recycled building methods.  According to the article, Costa Rican government wants to use these methods to make this new airport the first certified “green” aeródromo in Central America.

The Osa Peninsula, specifically the Corcovado National Park, was once described as “the most biologically intense place on the planet” by National Geographic magazine.  Eco-tourism draws thousands of tourists, students and environmentalists to the area every year.  The Minister of Air Transportation seems to get this bigger picture when he said, “The master plan will contemplate each phase of design, construction and operation.  It will be constructed using specific criteria and specialized techniques to guarantee the protection and conservation of the ecological resources and habitats.”

Whether it is possible to protect a wetland habitat adjacent to an airport remains to be seen, but the companies appear set to do their due diligence.  Over the course of the next 14 months, Inforest Consultores Ambientales will be measuring the migration patterns of the various birds species in the immediate wetland areas.  Specifically, they want to know exactly when these bird species will be on the move.  Their intention is to cancel a time frame of flights (common in other areas) that may impact the well being of these species.  They are also planning to protect 7,000 hectares of wetlands in the surrounding area into perpetuity.


Ideally located between the Costa Ballena and the Osa Peninsula… or is it?

The original (and obvious) idea for the airport was to expand the current regional airport in Palmar to accommodate planes capable of traveling longer distances and carrying more people.  What those initial studies determined was the mountain range directly east of the location made it a potentially dangerous fly zone, not to mention the entire town of Palmar would need to be moved and the property owners compensated for being displaced.

The new and current plan involves locating the airport on Fincas 9 and 10 in Sierpe (see image).  This location is less than 5 minutes from the current Palmar Regional Airport on flat land that is/was used for banana and date palm plantations.  I’m not an aviation expert, but these flat, contiguous parcels do seem to offer a better orientation for take offs and landings.

The landing strip will be 2.2km, one less than the Int’l airport in San Jose and with a main terminal building that will be five times smaller than the recently expanded airport in Liberia.  It will service small planes, corp. jets, and (most important for tourism) the 190 and 320 Airbuses capable of carrying up to 150 passengers.  Clearly, the thought of driving 30 minutes to the Costa Ballena instead of 3 hours is appealing to many tourists, business owners, and investors.

Pros and Cons-clusion

The problem for environmentalists is the proximity to the Terraba-Sierpe National Wetlands and the wildlife contained therein.  They also point to Costa Rica’s wildlife as the main reason people visit the area.  Investors, hoteliers and business owners are hoping the two companies conducting the studies will be able to show that the impact on the environment will be minimal and/or off-set by the “green” building materials and sustainable energy sources, so it can move forward.  For better or worse, the future of the area will be dramatically affected by these reports.

About Tigre

My first visit to Costa Rica was in 2002. I immediately fell in love with the warmth of the climate and people. After spending two weeks in San Jose, Puerto Viejo on the Caribbean side, and Tamarindo in Guanacaste, I knew there was a good chance I would return sooner than later. Sooner came just 6 months later when my uncle mentioned he was flying down to Costa Rica to close on a piece of property in the Southern Pacific Zone. On that trip I found my own piece of paradise above the small town of San Buenaventura, home to the San Buenas Golf Resort. Two years and 8 trips later, I decided to move to Costa Rica full time. Every day I am thankful for that decision.

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