Costa Rica's Real Estate Market in Mid-2025: Are We in a New Cycle?

Discover Costa Rica's dynamic real estate market—a land of 'Pura Vida' and evolving opportunities for discerning buyers.

Back in 2005, an article titled "Nation confronts a sizzling market" captured the excitement of a burgeoning Costa Rica real estate market. Fast forward to mid-2025, and while certain areas like Nosara, Santa Teresa, Malpais, and Flamingo's Potrero remain strong seller's markets, the national picture is more nuanced than a simple "boom or bust." While interest from international buyers and investors is indeed increasing across many regions of the country, recent data suggests a market undergoing dynamic adjustments.

The Cycles of a Maturing Market

Real estate cycles are a well-documented phenomenon. As a tourism destination matures, it typically moves through phases: exploration, involvement, development, consolidation, stagnation, and decline/rejuvenation. History shows property markets often run in 15- to 20-year cycles, with periods of downturn followed by slow recovery. After the significant real estate market bust in 2007-2008, Costa Rica entered a long period of stagnation. Many analysts in the early 2020s predicted the beginning of an upturn cycle.

Indeed, by early 2025, anecdotal evidence from Costa Rican notaries and real estate agents in high-demand areas pointed to increased transaction volumes. The Costa Rican real estate market demonstrated robust growth throughout 2024, with property values increasing by approximately 7.8% across the country. Coastal regions like Guanacaste and the Southern Zone experienced significant growth, with some areas seeing appreciation rates of 10-12% year-over-year. The Central Valley maintained a stable 4-6% increase. Price appreciation is expected to continue with a 6-8% annual growth rate through 2025-2026.

However, recent April 2025 market reports indicate a slight moderation in overall transaction volumes (down ~10% year-to-date for single-family homes) and a decrease in median sold prices. Year-to-date (YTD) 2025 data shows an 11% increase in single-family home inventory, paired with a 29% drop in median sold prices to $652,000. Condo and luxury segments are also seeing price corrections, with median sold prices down 11% ($445,000) and 12% ($1.40M), respectively. These price corrections present a strategic advantage for buyers, offering more choices and significant negotiating power, especially in the luxury and condo markets. This shift signals a maturing market, allowing discerning investors to find compelling value and secure properties that align with long-term investment goals. Meanwhile, residential lot prices are bucking the trend, rising 21% to $282,000, signaling strong demand for development opportunities.

This indicates a bifurcated market: competitively priced and well-maintained properties are selling swiftly, while others may experience longer selling periods. This highlights the importance of strategic pricing and property presentation for sellers. Areas like Guanacaste, Santa Teresa, Dominical, and the Central Valley remain key regions for luxury homes, vacation rentals, and investment properties. Rental yields remain attractive, typically ranging between 5-8%, with vacation rentals in prime tourist areas achieving 6-10% annually.

What's Fueling Interest in the Costa Rica Property Market?

Several elements are contributing to the continued interest in the Costa Rica property market: