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Monday, May 20, 2024

Guanacaste’s Booming Property Market Threatens Displacement of Locals

Guanacaste is one of Costa Rica’s most popular destinations and one of the most sought-after places for Real Estate developments. It attracts millions of tourists each year, many of whom choose to move permanently later. However, it’s not paradise for everyone, especially locals who, for many years now, struggle to live in the place they have always called home.

Guanacaste coastal property prices increased by 400% between 2020 and 2023, as shown by the Observatory of Tourism, Migrations, and Sustainable Development of the Chorotega Region of the National University (OBTUR-UNA).

From 2017 to 2019, a surge in real estate construction has been evident, which, despite a slowdown in 2020, rebounded by almost double in two years.

“The commercial sector in Guanacaste went from building 131,000 m2 in 2019 to 209,000 in 2022, which represents a less dramatic but very significant growth. These two sectors were considered because they are the most related to tourism and second residences, mainly in coastal areas, where the highest records were given,” said Esteban Barboza Núñez, coordinator of the observatory.

Santa Cruz, Nicoya, Liberia, and Carrillo have the largest number of housing and commercial construction projects. Meanwhile, Nosara registered 131,000 m2, Tamarindo 128,000 m2, Sardinal 117,000 m2, Cabo Velas with 98,000 m2, Samara a total of 28,000 m2, and Nacascolo 24,000 m2, plus the central district of Liberia with 83,000 m2.

For perspective, only San José recorded a greater amount of construction in housing and commercial projects than Guanacaste did. Barboza pointed out that, according to last year’s data, of all the square meters processed to build real estate developments in the country, 25% will be concentrated in Guanacaste.

The real problem that this phenomenon brings real estate inflation, which affects thousands of people, especially locals. For instance, if a property was worth $100,000 four years ago, today it costs around $400,000 or $500,000. In terms of rentals, a 15 m2 to 20 m2 apartment in Nosara can cost $700 or $800, while the rent for a social housing unit in the same locality costs $1,500.

According to Barboza, this represents a serious issue since luxury real estate developments tend to displace people who cannot opt for or afford this type of housing. This triggers a process of dispossession, and those who lived in those communities are forced to look for new places to settle.

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