Costa Rica’s Residential Property Market Analysis 2025

The Costa Rican housing market remains well-positioned for long-term resilience, with property prices consistently on the rise, supported by strong foreign and domestic buyer demand in key coastal markets and tourist hotspots.

This extended overview from Global Property Guide covers key aspects of the Costa Rican housing market and takes a closer look at its most recent developments and long-term trends.

Table of Contents

• Housing Market Snapshot
• Demand Highlights
• Supply Highlights
• Mortgage Market
• Rental Market
• Socio-Economic Context

Housing Market Snapshot

Residential property prices in Costa Rica continue to trend upward, although growth rates vary by region. The strongest performance is observed in Guanacaste and the Central Valley (extending from San Ramón in Alajuela in the west to the city of Paraíso in Cartago in the east), reflecting their sustained popularity among tourists and expatriate communities. According to Coldwell Banker, in 2024, nationwide property values rose by 7.8%, supported by foreign investment and lifestyle migration, with momentum expected to carry through 2025.

Costa Rica's house price annual change:

As of June 2025, the Guanacaste/Nicoya Peninsula, a prime market for luxury homes and vacation rentals, recorded the country's highest median listing price at USD 1.32 million. Although this represented a modest 3.05% year-on-year decline, prices remained significantly above the national average. The Central and South Pacific region posted a 5.2% annual increase, reaching USD 1.11 million, while the Central Valley, home to San José, Escazú, and Santa Ana, favored for their infrastructure and amenities, saw median prices climb 7.65% year-on-year to USD 610,685.

Data from real estate portal Encuentra24.com highlights further regional and property-type trends. In July 2025, Guanacaste province registered the highest average prices nationwide, with apartments at USD 2,990 per square meter and houses at USD 1,582 per square meter. The lowest prices were reported in Limón and Heredia provinces. In San José, the capital city, apartment prices averaged USD 2,701 per square meter, reflecting a 20.03% annual increase, while house prices rose 10.64% to USD 1,100 per square meter.

Average asking price dynamic by province:

Looking ahead, analysts anticipate continued price growth, driven by sustained demand from digital nomads, retirees, and internationally oriented investors, alongside infrastructure upgrades and tax incentives for foreign buyers. While high-growth areas such as Guanacaste and the Southern Zone present strong opportunities, investors should be mindful of risks including legal complexities, currency volatility, and environmental regulations. With sustainable developments gaining traction and prime locations offering competitive rental yields, Costa Rica's real estate market remains well-positioned for long-term resilience, supported by its global appeal, political stability, and favorable tax environment.

Demand Highlights:

Strong Sales Momentum Driven by Middle-Class Expansion and Foreign Investment

Demand for residential properties in Costa Rica is supported by a growing middle class and the country's popularity among foreign investors, particularly expatriates and retirees from North America and Europe. Foreign capital is primarily concentrated in the Central Valley, Guanacaste, and along the Pacific Coast. Beachfront properties and homes in gated communities with high-quality amenities and good accessibility remain the most sought-after asset types, with demand often exceeding supply. Investment-driven purchases are gaining traction among both foreign and domestic buyers, especially in coastal areas and near tourist destinations.

Costa Rica's legal and policy framework is generally favorable to foreign ownership, allowing non-residents to hold property outright, unlike in many other Central American countries. However, most beachfront properties fall under the Maritime Zone Law, which restricts direct foreign ownership within the first 200 meters from the high-tide line and instead permits leasing through concession agreements.

Research by Gutiérrez & Gallardo indicates sustained growth in new home sales within the Extended Greater Metropolitan Area (Gran Área Metropolitana Ampliada - GAMA). In 2024, a total of 5,798 residential transactions were recorded in the area, representing a 6.80% year-on-year increase. "New home sales in the Greater Metropolitan Area (GMA) have shown a significant increase, with average absorption levels exceeding 5,200 units annually over the past three years, representing an increase of nearly 30% compared to the 2019-2021 period," commented Ing. Jaime Andrés Arango G. of Gutiérrez & Gallardo.

Houses accounted for the largest share of transactions at 46% (2,687 units), followed by apartments at 35% (2,041 units) and urbanized condominium lots at 18% (1,070 units). Although apartment sales recorded a slight year-on-year decline, analysts expect their share of transactions to grow over time, driven by limited land availability for new housing and rising land costs.

Gran Área Metropolitana Ampliada (GAMA) sales by property type:

Geographically, Oeste municipality registered the highest share of sales (35%), followed by Heredia (18%) and Este (12%). The strongest annual growth in sales was recorded in Sur (36.98%), Norte (21.05%), and Oeste (19.10%).

Gran Área Metropolitana Ampliada (GAMA) sales by municipality:

Looking ahead, analysts expect residential demand trends to be influenced by Costa Rica's economic and trade ties with the United States. Prolonged uncertainty over US trade policy and tariffs could weigh on export-oriented sectors, particularly within free trade zones, with potential knock-on effects on employment and consumer confidence. Higher costs for US-imported construction materials could also limit purchasing power. However, easing inflation domestically and internationally is raising expectations for lower interest rates, which may provide some support to housing demand.

Supply Highlights:

Modest Housing Stock Growth Amid Evolving Construction Dynamics

The most recent housing census, conducted in Costa Rica in 2022, recorded a total housing stock of 1.8 million units - a 35% increase compared with the previous census in 2011. The fastest growth was observed in the provinces of Puntarenas (43.1%), Alajuela (40.3%), and Guanacaste (43.0%). In terms of distribution, the largest share of housing was concentrated in San José (32%), followed by Alajuela (19%) and Puntarenas (11%).

The proportion of unoccupied dwellings nationwide reached 11.7% in 2022, up 2.1 percentage points from 2011. The share was notably higher in provinces with strong tourism activity, including Limón (14.5%), Puntarenas (19.3%), and Guanacaste (19.4%), likely reflecting elevated demand for short-term rentals and vacation housing in coastal areas.

According to the National Household Survey (ENAHO), Costa Rica's occupied housing stock, across all tenure types, grew by 30,456 homes between 2023 and 2024, equivalent to a 1.71% annual increase. "This increase in the number of homes in the housing stock of around 30,000 is lower than the annual increases reported in the periods 2023 and 2022, when the number of homes in the housing stock increased by more than 50,000 per year," commented Melizandro Quirós, Executive Director of the Center for Financial and Real Estate Business Studies (CENFI).

Preliminary data from the National Institute of Statistics and Censuses (INEC) shows that in 2024, residential construction activity declined slightly in terms of the number of approved dwellings, with 23,093 new units authorized, reflecting a 5.27% year-on-year decrease. However, the number of permits issued grew by 1.43% over the same period, while the total approved housing area fell by 2.3%. Key challenges cited by industry experts include bureaucratic delays, complex administrative procedures, limited credit availability, and elevated construction costs.

Data Source: INEC.

By province, the largest share of new housing authorizations in 2024 was recorded in Alajuela (22%), followed by Puntarenas (18%) and San José (17%). The most notable growth, both in units and total approved area, occurred in Cartago, while San José experienced the sharpest declines.

Housing construction dynamics by province:

In early 2025, activity showed signs of improvement. During the first quarter, the central bank's Monthly Index of Residential Unit Starts (IMIUR) recorded an average year-on-year increase of 17.0% in housing construction starts. Over the same period, more than 1.19 million square meters of intended housing projects were registered with the Federated College of Engineers and Architects of Costa Rica (CFIA), a 10.19% increase compared with the first quarter of 2024, pointing to a generally positive outlook for the sector this year.

Mortgage Market:

Interest Rates Stabilize, Credit Stock Expansion Slows Further

After a nine-month holding period during which the Central Bank of Costa Rica (BCCR) maintained its monetary policy rate (MPR) unchanged at 4.00%, the regulator recently announced a 25 b.p. cut in July 2025, bringing the benchmark to 3.75%. This decision marked the twelfth reduction since the spring of 2023, when the central bank began to gradually relax its stance after a series of rapid rate hikes in 2022.

Costa Rica's mortgage loan interest rates:

Commenting on the decision, the BCCR noted that based on recent developments in inflation expectations (headline inflation in the country registered negative values in the previous two months and remains below target range), a four percent MPR was "slightly higher than what the central bank considers consistent with a neutral monetary policy stance", allowing a cautious reduction against the high level of uncertainty still prevailing in the global environment.

Data Source: BCCR.

Along with the less dynamic monetary policy rate in late 2024 and early 2025, the average interest rates on housing loans in Costa Rica also showed signs of stabilization. For loans in national currency, the indicator is still on a general downward trajectory, but has been declining at a much slower pace, reaching 7.66% in June 2025, only 0.26 p.p. down since June 2024. For loans in foreign currency, the average rate has been fluctuating between 7.5%-8.0% in the last twelve months, most recently reported by the BCCR at 7.58% in June 2025.

Overall, the long-term trend shows a narrowing of the gap between interest rates on loans denominated in national and foreign currencies in the last decade. Within the Costa Rican financial system, the lowest average rates on housing loans are traditionally reported by public banks, followed by private banks, while other deposit-taking institutions (DTI), such as cooperatives and mutuals, as well as non-depository financial institutions, offer more expensive credit products.

Average interest rates on real estate activity loans (including housing):

Despite the decrease in interest rates, the residential lending market in Costa Rica has not yet returned to growth, based on data published by the BCCR. After a period of rapid expansion when the annual increase in the total value of outstanding housing credit averaged about 16% between 2004 and 2018, stock expansion slowed to only 3.5%, on average, between 2019 and 2022 and even went into negative territory in the last two years, dropping by 2.1% in 2023 and 1.5% in 2024. Sized against the country's GDP at current prices, the value of housing loan stock has decreased from an estimated 17.3% in 2020 to an estimated 13.2% in 2024.

As of February 2025, the combined housing loan stock maintained by the Costa Rican financial system stood at CRC 6.5 trillion (USD 12.8 billion). About 53% of the combined value is made up by DTI loans issued in national currency, 25% by DTI loans issued in foreign currency, and the remaining 23% by loans issued by non-depository financial institutions.

At the same time, the use of credit for house purchase among Costa Ricans remains limited. The 2024 National Household Survey (ENAHO) conducted by the INEC showed only 6.9% of the country's 1.8 million dwellings as being paid off by installments. According to a recent study from the Center for Financial and Real Estate Business Studies (CENFI) cited by La Nación, within a year "financing [of housing] increased by nearly 2,000 units among families in the country's highest income bracket, those earning more than CRC 2.6 million per month", which indicates affordability of financing as a constraining factor for the market's further growth.

Data Sources: BCCR, OECD.

Rental Market:

Rental Inflation Slows But Remains Under Pressure

According to the results of the 2024 National Household Survey (ENAHO) conducted by the INEC, 18.8% of Costa Rica's 1.8 million dwellings are rented (around 340 thousand units). Within the last two years, the rental market expanded by 8.6% (almost 27 thousand units). Melizandro Quirós, executive director of CENFI, previously tied the rise in renting among lower-income groups to the lack of affordable housing, high borrowing costs, and informal employment, which entirely excludes many Costa Rican families from the financing system. For higher-income families, the dynamic is linked to the limited supply of for-sale properties in popular central areas, leading to the increasing trend of purchasing properties as investments, with the extra income then being used to cover rent.

Costa Rica's rent price index:

Reflecting these developments, rental inflation in Costa Rica, measured by the annual change in the actual rents for the housing component of the Consumer Price Index (CPI), has been outpacing the overall price growth in the country since early 2023. The latest reporting from the INEC shows the year-on-year increase in rents at 2.2% in July 2025, while the overall inflation during the same period was in the negative territory at -0.6%. At the same time, rental inflation has decelerated in recent months, dropping by 2.2 percentage points since January.

According to the CENFI research, as cited by the CRHoy news outlet, the cumulative increase in housing rentals in the last three years approaches 14%, indicating a growing and persistent imbalance between demand and supply in the market.

"Housing rentals in Costa Rica have been experiencing significant pressure in recent years," commented Melizandro Quirós, adding that the situation is unlikely to change in the upcoming periods. "We don't expect a short-term improvement; we could even end this year with rent increases above 5% annually," he said.

Data Source: INEC.

In nominal terms, average asking rents reported by the listing platform Encuentra24.com for key regional submarkets reached USD 10-16 per square meter for apartments and USD 7-10 per square meter for houses in July 2025.

The research by Global Property Guide conducted in May 2025 found listed rents at the average level of USD 850-1,000 for 1-bedroom units, USD 1,000-1,400 for 2-bedroom units, and USD 1,250-2,300 for 3-bedroom units. The corresponding gross rental yields for residential properties in Costa Rica averaged at 7.84%, up from 7.27% previously reported in July 2024. Among the monitored submarkets, the highest yields were recorded in Heredia (8.37%) and San José (8.35%), and the lowest potential performance was observed in Escazú (7.18%).

Average asking rents by property type in selected provinces:

In general, the regulation of residential rental agreements in Costa Rica falls under the General Law of Urban and Suburban Rentals. Landlords have the authority to set rental prices for their properties, but rental increases for existing contracts are governed by law. The regulations differ based on the currency used in the lease agreement.

For leases denominated in foreign currencies, such as US dollars, the rental price remains fixed for the duration of the contract, with no provision for increases. Conversely, for leases in Costa Rican colons, annual adjustments may be made based on the accumulated inflation rate over the preceding 12 months. If the inflation rate is 10% or less, the landlord may increase the rent by a corresponding percentage, using the CPI published by the INEC. Should the accumulated inflation exceed 10%, the Ministry of Housing and Urban Settlements (MIVAH) will set the allowable increase, ensuring it is neither below 10% nor exceeds the annual inflation rate.

Socio-Economic Context:

Growth Moderates, Tourism Faces Headwinds

The annual expansion of the Costa Rican economy has averaged over 5% since 2021, outpacing regional peers and making it one of the fastest-growing economies in the Western Hemisphere. In 2024, real GDP growth reached 4.3%, driven by exports, inward FDI, and strong domestic demand, with construction and manufacturing sectors standing out.

The International Monetary Fund (IMF) projects Costa Rica's growth will stabilize around 3.4% in 2025 and remain broadly around its potential over the medium term. "This projection reflects an estimated impact of 0.5 percentage points on 2025 growth resulting from the US tariffs of 10 percent on goods imports from Costa Rica, announced on April 2, and through global tariffs' impact on external demand," noted the 2025 Article IV staff report from the IMF.

In parallel with strong growth indicators in recent years, the country has experienced a dramatic turnaround in Consumer Price Index (CPI) inflation, which spiked to the annual level of 8.3% in 2022 before dropping to just 0.5% in 2023 and -0.4% in 2024. Most recently, the indicator was reported by the INEC at -0.6% in July 2025.

Proactive policy rate cuts by the BCCR, however, helped to anchor inflation and inflation expectations in Costa Rica, according to the IMF. It is currently projected to rise to the annual level of 2.2% in 2025 before returning to the central bank's target of 3% in 2026.

Data Source: IMF.

One of the pillars of the local economy and a major generator of foreign exchange, the Costa Rican tourism industry has not yet fully recovered from the pandemic-related decline five years ago. In 2024, the number of international arrivals to the country exceeded 2.9 million, representing a 6.1% year-on-year increase, but remained 7% below the 2019 benchmark. The majority of visitors arrived in Costa Rica from North America (68%) and Europe (17%), with key markets of origin traditionally being the United States and Canada.

While BMI analysts anticipate the sector to fully recover in 2025, the latest reporting from the Costa Rican Tourism Institute (ICT) does not support this optimistic outlook. In the first six months of this year, a little over 1.6 million international arrivals were registered, marking a 3.0% decline compared to the same period in 2024.

Several factors, reportedly, have led to this downturn, including the increase in travel costs, largely driven by the appreciation of the local currency (CRC 506 per USD in June 2025 down from the peak of CRC 685 in June 2022), infrastructure issues, and safety concerns over rising crimes and recent health scares, such as shellfish contamination and increase in mosquito-borne diseases. To counter the decline, the authorities have launched new digital travel guides, promoted domestic tourism, and boosted spending on security; however, these measures might not be sufficient for the sector to regain momentum. "Industry experts warn that without serious investment in infrastructure and stronger crime prevention, Costa Rica risks losing its edge in an increasingly competitive regional tourism market," The Tico Times wrote in July 2025.

Data Source: ICT.

In the Costa Rican labor market, the IMF staff report notes rising real wages and expanding formal sector employment, both contributing to improved social indicators, with poverty and inequality in the country now at historically low levels. The unemployment rate is also at the lowest in a decade, most recently reported by the INEC at 7.4% as of Q2 2025, down from 8.5% a year ago and 9.6% two years ago. At the same time, the market continues to face challenges, including a tight landscape for skilled professionals, declining labor force participation due to an aging population, and low female participation.

Data Source: INEC.

Overall, Costa Rica's economic outlook is expected to remain favorable in the near term. According to the World Bank assessment, downside risks to the outlook include uncertainties about global trade policy, geopolitical tensions that could disrupt supply chains and raise prices, and tighter global financing conditions. Domestically, reduced revenues or unexpected spending could slow fiscal consolidation, while extreme weather could affect agriculture and tourism.

In February 2025, Fitch Ratings affirmed Costa Rica's 'BB' standing and revised the outlook from stable to positive, citing the economy's strong growth above estimates of potential, improvements in external position, and a gradually declining debt trajectory among the factors behind the rating action.

Sources:

1. National Institute of Statistics and Censuses of Costa Rica (INEC)
   1. Construction Statistics 2024: Preliminary Annual Results (ES): https://inec.cr/
   2. National Household Survey (ENAHO) 2024, General Results (ES): https://admin.inec.cr/
   3. Price Index Shows Largest Monthly Decline Since February 2023 (ES): https://inec.cr/
   4. Unemployment Rate Recorded at 7.4% in the Second Quarter of 2025 (ES): https://inec.cr/
   5. Population and Housing Estimate 2022, General Results (ES): https://admin.inec.cr/
   6. Census 2022: https://inec.cr/
2. Central Bank of Costa Rica
   1. Economic Indicators: https://sdd.bccr.fi.cr/
   2. Monetary and Financial Indicators: https://sdd.bccr.fi.cr/
   3. BCCR Board of Directors Reduces Monetary Policy Rate by 25 Basis Points (ES): https://www.bccr.fi.cr/
   4. BCCR Revises Costa Rican Economic Growth… (ES): https://www.bccr.fi.cr/
   5. Monthly Index of Residential Unit Starts (IMIUR): https://app.powerbi.com/
3. International Monetary Fund (IMF)
   1. Country Overview: Costa Rica: https://www.imf.org/
   2. 2025 Article IV Staff Report: https://www.imf.org/
   3. Costa Rica: Request for an Arrangement under the Flexible Credit Line-Press Release and Staff Report: https://www.imf.org/
   4. IMF Executive Board Approves New Two-Year US$1.5 Billion Flexible Credit Line Arrangement for Costa Rica: https://www.imf.org/
4. World Bank
   1. Country Overview: Costa Rica: https://www.worldbank.org/
   2. Costa Rica MPO, April 2025: https://thedocs.worldbank.org/
5. Organization for Economic Co-operation and Development (OECD)
   1. OECD Data Explorer: https://data-explorer.oecd.org/
6. Federal Reserve Economic Data (FRED)
   1. US Dollar Exchange Rate: Average of Daily Rates: National Currency: USD for Costa Rica: https://fred.stlouisfed.org/
7. Costa Rican Tourism Institute (ICT)
   1. Statistics (ES): https://www.ict.go.cr/
8. Federated College of Engineers and Architects of Costa Rica (CFIA)
   1. Construction Statistics: https://cfia.or.cr/
9. Costa Rican Legal Information System
   1. Law on the Maritime-Terrestrial Zone No. 6043 (ES): https://pgrweb.go.cr/
   2. General Law on Urban and Suburban Leases (Tenancy) No. 7527: https://pgrweb.go.cr/
10. BMI
    1. Costa Rica's Tourist Arrivals Will Fully Recover Over 2025, Supported By Infrastructure Developments: https://www.fitchsolutions.com/
11. Fitch Ratings
    1. Fitch Revises Costa Rica's Outlook to Positive; Affirms IDR at 'BB': https://www.fitchratings.com/
12. Gutiérrez & Gallardo
    1. Revista GAMA Inmobiliaria | Edición 27 (2025) (ES): https://gyg.cr/
    2. Revista GAMA Inmobiliaria | Edición 26 (2025) (ES): https://gyg.cr/
13. Coldwell Banker
    1. Costa Rica Real Estate Market Trends 2025: What Buyers Need to Know (ES): https://www.coldwellbankercr.com/
    2. June 2025 Costa Rica Real Estate Market Report: Trends by Property Type & Region: https://www.dominicalrealty.com/
14. Encuentra24.com
    1. Property Price Trends: https://www.encuentra24.com/
15. La Nacion
    1. Housing Rentals Among Lower-Income Households Skyrocketed last year (ES): https://www.nacion.com/
    2. Study Confirms 'Worrying' Deterioration of Housing in Costa Rica (ES): https://www.nacion.com/
16. CRHoy
    1. Housing Rentals Have Risen More Than 14% in the Last Three Years (ES): https://crhoy.com/
17. The Tico Times
    1. Costa Rica's Tourism Faces Decline Amid Rising Crime and Costs: https://ticotimes.net/
18. Delfino
    1. X-ray of Housing Tenure in 2024 (ES): https://delfino.cr/