The Effect of the Economic Crisis in Costa Rica
This is a short summary of how the crisis happened in Costa Rica, which were the actions taken by the government and private entities and what would be the future of real estate in Costa Rica and the importance of taking measures to enhance growth and development in the sector real estate in Costa Rica.
After the great real estate "boom" that existed until the years 2007-2008, with large and ambitious housing, hotels and mega-developments both in the capital and in coastal areas, projects the whole world was "surprised" by a new crisis world, who came to put our feet on the earth millions of people and bring us back to a real very different from what we were experiencing at that time life.
Since mid-2008 the crisis was a reality in the United States, which did not escape us here in Costa Rica. One of the sectors most affected was the construction so that these housing and hotel projects, much of foreign capital, orphaned and abandoned, especially in coastal areas and major projects, examples of this are the areas of Jaco and Guanacaste, where many foreign investors had to suspend their activities and projects literally were "stranded".
The speed with which they identified projects completely fell years ago, and only a few isolated projects continued its course but at a slower pace. This recession affected many others and scared, many domestic and foreign banks closed their doors to new loans and froze existing ones.
In 2009 the picture was not very different, massive layoffs and lack of options made construction business a reason that few wanted to risk taking. The over-supply of offices, shops and other building infrastructure coupled with downsizing was one of the major consequences of the crisis.
Today, in mid-2011, the picture is a little more encouraging. It shows more movement, some projects and areas advancing, others less so, but the feeling is that the market moves slowly, but it moves, giving a glimmer of hope for those who lost their jobs or had already invested some capital in the country. Reactivation an air breathing, with very different rules, new guidelines set by municipalities more attached to control urban planning or regulatory plan, as banks tightened their requirements and projects based primarily on middle-class or first home.
In Guanacaste, specifically, the market is not fully recovered. According to the Costa Rican Chamber of Construction, Guanacaste is the province that showed greater decrease, the process just a third of the square footage processed in 2007 and the large number of projects built second home. Now the market is primarily focused on local customers by offering discounts in some cases up to 40%.
The important thing is that the market is reactivated, slowly, but now taking into account more variables and the lesson learned from all that has happened. The greater metropolitan area has been the busiest in terms of buildings is concerned, living examples are the large new commercial projects are underway in East San Jose, Escazu and Tres Rios specifically and western Heredia.