Monday, January 24, 2011
Dear Reader,
Costa Rica’s Southern Zone runs south of Dominical to the border with Panama. It’s an area of deserted sandy beaches and virgin rainforest. Prices stayed low here because this area was difficult to get to.
Impossible, in fact, at certain times of year, without the right type of vehicle. Drive time from San Jose could take up to ten hours. This was the type of road you had to navigate:
Today, with the new coastal highway that opened in January 2010, the drive time is more like three hours. This is what the new road looks like:
Prices stayed low here because this area was difficult to get to. That’s changing. Along with the new coastal highway, plans call for an international airport here.
Up until now, this area has been overlooked and underdeveloped. However, this doesn’t mean you have to sacrifice daily conveniences. Local towns like Ojochal feel surprisingly cosmopolitan. You have a choice of international cuisines—French, German, Italian, Indonesian.
The baguettes from the local bakery are sold warm, fresh and crisp. You can buy your cheese next door; it’s worth the short trip. The fridge at the delicatessen is piled high and deep with cheeses from Europe’s trophy cheese-producing regions. This is also the place to match wine or champagne with your cheese selection.
Ojochal has a doctor’s office, a dentist’s office, gas station, hardware store, Internet cafe and a supermarket. It’s close to the modern Hospital de Osa, too, which opened in April 2008.
Ballena Marine Park (and the four beaches within it, including Playa Uvita) is nearby. The best beach closest to Ojochal is Playa Pinuela, located in a pretty cove, and with little tourist traffic.
President Laura Chinchilla was in the area last October, lending her support to the planned international airport. The President toured the region and attended several meetings, emphasizing the importance of support for the tourism industry and the airport wherever she went.
Things are pretty good in Costa Rica. Tourism level looks set to start returning to the peak seen in 2007 this year. Moody’s Investor Service last year raised the government’s bond rating to investment-grade status.
The country’s GDP grew by around 4.5% in 2010. Chinchilla’s government aims to attract $9 billion in foreign investment to Costa Rica over the next four years.
Eco-tourism in the Southern Zone will be a big engine for growth in Costa Rica. I saw and heard about the government’s commitment to this area everywhere I went.
Already, the new highway has kick-started the opening of this region to mainstream tourists and second-home buyers. For example, Uvita, a small town close to Ojochal, is attracting a growing number of expats. Two years ago, the town had an ATM…in the back of an old school bus parked on concrete blocks. Today the town has three bricks-and-mortar banks. Last year, Uvita didn’t have a car rental agency…today the town boasts three. In the last two years, eight new commercial plazas have sprung up.
But things are only getting started here. You can still profit by putting yourself ahead of the path of progress. Even now, after the new road has opened, you can still buy a quarter-acre lot in Pacific Lots, the gold-standard project in the region, for $40,000. This is changing though…and fast. The place is starting to buzz with real estate activity. Everything points to this area exploding.
Remember what happened to real estate values in northern Costa Rica? It was tricky to get to. Liberia airport only had the occasional international flight. Drive-wise, it took around five hours to reach from San Jose on a rough, potholed road. Only diehard surfers and backpackers braved the journey. Mainstream tourists stayed away.
Then the road was resurfaced. And in 2002, regular direct flights started from Liberia airport to the U.S. In 2003, Liberia airport saw 50,000 passenger arrivals. By 2008, passenger arrivals in Liberia had soared to 500,000. Resort and residential developers raised the bar, snapping up the best beach and ocean-view land. In the three years after regular direct flights started, the price of prime land quadrupled.
I expect we’ll see a similar trend in Costa Rica’s Southern Zone. Thing is, the Southern Zone is nicer and should stay that way. Strict environmental protections mean development will be limited and controlled. It restricts development and adds dramatically to costs. There will be limited supply and you won’t see the type of sprawl we have seen farther north. Nature will take priority here.
Pacific Lots is only a few minutes from Ojochal. It’s the finest project in the area—yet $40,000 buys you a quarter-acre site…and $100,000 buys you an ocean view lot. Compare this with northern Costa Rica, where a half-acre ocean-view lot could set you back up to $600,000.
Pacific Lots is a mature, established development, with over 150 homes already constructed. It’s fully serviced with roads, water, electricity, satellite TV, Internet and a modern communications system. There is no clubhouse or communal amenities at Pacific Lots. The developer made a conscious decision to keep HOA fees to an absolute minimum. This makes sense as Ojochal, just minutes away, has an amazing selection of quality restaurants, cafes and a delicatessen.
Of course, the main amenity here is the beaches…and the nature that surrounds you.
I spent a day with Pacific Lots’ Steve Linder on the property and in the surrounding area last month. Last year was a crazy year for Steve. He has gone from hosting eight chill weekends a year to four or five per month. 2010 was his strongest year ever in sales. I think it’s just getting started. The world hasn’t caught on to the potential of this place… yet.
Ronan McMahon
Editor’s Note: RETA members get special members-only pricing here. Twenty nine lots are available with savings of up to $30,000 on a lot. For example, a river lot of over an acre zoned for commercial or residential lists for $60,000. Members of Real Estate Trend Alert can buy this lot for $40,000….a 33% discount. An ocean-view lot of over half an acre listing for $90,000 can be yours for $65,000…a discount that’s just shy of 28%. A “primo” lot with killer ocean and mountain views lists for $150,000. Members pay $120,000…a 20% discount. Watch this video to find out about the benefits of membership and how you can get in on this member-only pricing.
Posted Under:
costa rica, appreciation potential
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