Friday, March 26, 2010
Dear Reader,
Back in 1983, when International Living first recommended Costa Rica as an overseas destination, readers homed in on the province of Guanacaste, and specifically the Gold Coast. And why not? The Gold Coast boasted endless stretches of sandy beaches, washed by deep-blue Pacific waters, and beachfront properties that cost a fraction of those in California.
In the following years, infrastructure upgrades and increasing numbers of tourists pushed those property prices skywards. If you missed your chance to profit back then, you need to pay attention. We've uncovered a similar story in another part of Costa Rica. What's more, this area easily tops the Gold Coast when it comes to stunning, dramatic landscapes.
In the 1980s, Guanacaste was a tough five-hour drive from the capital, San José, on bad roads. Backpackers and surfers willingly braved the roads. Mainstream tourists didn't.
Property developers quickly realized the potential of this location. Prices for real estate rose steadily, and the numbers of tourists and property shoppers gradually increased.
High-end resorts and developments, such as Peninsula Papagayo with its Four Seasons hotel (Costa Rica's most expensive hotel), raised the bar. Peninsula Papagayo was a $400 million dollar project, spread over 2,300 acres, on land set aside for tourism by the Costa Rican government.
These major developers invested in infrastructure, too. Peninsula Papagayo paid for roads, sewers, electricity, and its own emergency services. Along with the owners of two similarly upscale developments, they put up their own money to persuade U.S.-based airlines such as Delta to fly direct to Liberia airport. They realized that without those direct flights, they could not achieve the number and caliber of guests to justify luxury resort hotels, and luxury residences, with luxury price tags.
Travel & Leisure commented on the Peninsula Papagayo development:
Before the resort opened in 2004, getting to this pristine but remote promontory in the northwest of Guanacaste required chartering a plane or navigating bone-rattling potholed roads. Now, major airlines fly direct from the United States to the airport, and newly paved byways make the trip from there to the hotel considerably smoother.
The market really exploded after Liberia's Daniel Oduber Airport started regular direct flights to many destinations in the U.S. in 2002. This opened up Guanacaste to a completely new market. More tourists traveled to this section of coast. In 2003, 50,000 passengers used Liberia airport. In 2008, 420,000 passengers used the airport, out of the record 2.5 million tourists arriving in Costa Rica. Expansion plans are in the offing for Liberia airport to handle more planes, and more passengers.
Property prices increased dramatically in Guanacaste once international flights started in Liberia. Property developers snapped up available beachfront and ocean view land. Prime beachfront lots quadrupled in value in the three years after the direct flights started.
More tourists traveling here meant that more tourists fell in love with Guanacaste...and wanted to own a piece of it. The inevitable happened.
Prices soared. An average condo in Tamarindo, a popular Gold Coast seaside town, now costs $300 a square foot. A one-twelfth share of a three-bed villa in Peninsula Papagayo will set you back $225,000. Half-acre ocean-view lots can fetch $600,000.
Don't worry if you missed out on the Gold Coast. Right now, there is a similar infrastructure happening in another part of Costa Rica that's caught our attention.
Like the Gold Coast in the early days, getting here was tough. The coastal highway was one of the worst roads I've traveled on--more potholes than paving. The local airport is more of an airstrip and an open-sided hanger, with no airport amenities (forget ATMs, duty-free shopping, fast-food joints, decent washrooms...or planes with more than 18 passengers).
That kept mainstream tourists away. And it kept property prices low.
However, this area's now following the same Path of Progress as the Gold Coast. The government selected a site for a new international airport, and the contract is out to tender. Once open, the airport will initially handle smaller planes, and a year after opening, will accommodate the world's largest passenger planes.
The coastal highway opened officially in January. The thirty-year wait for this upgraded, resurfaced, improved road was worth it. Gone are the lunar-sized craters and unsurfaced sections. The drive to this area is now faster, smoother, and comfortable.
Mainstream tourists will now travel here in increasing numbers. The tourists will bring residential and resort developers, who'll want to buy the best beach and ocean view properties. They know that once tourists see this place, they'll want to spend time here...and want to own a piece of it. That all means one thing: property prices should rise.
Right now, you can buy a half-acre home site here with superb mountain views for $40,000, or a lot with both mountain and ocean views starting at $100,000. With custom homebuilding for only $100 per square-foot, you could build a 2,000-square-foot dream home for $200,000...on a lot with a to-die-for mountain view...for $240,000 in total.
Compare that to a one-twelfth ownership in a Peninsula Papagayo villa on the Gold Coast, for $225,000, and I think you'll agree that this new area merits a closer look. Click here to find out where this area is--and how you can explore it for only $250.
Margaret Summerfield
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