• Costa Rica Real Estate

New construction in Costa Rica grew 14 percent in 2015

February 1, 2016

New construction in Costa Rica grew 14 percent in 2015, reaching a level of production not seen here since before the global financial crisis of 2009, according to the Federated Association of Engineers and Architects.

The CFIA recorded over 9.2 million square meters of permitted construction in 2015, a figure that is 14 percent higher than in 2014. All data collected were from the registration of construction plans for projects that were supervised by architects and engineers that are members of the CFIA.

In Costa Rica, before the application for municipal building permits, all construction plans must be registered and approved by the CFIA.

The strongest construction sectors supporting the growth were the commercial sector, which grew by 31.2 percent, and the residential housing sector, which grew by 10.2 percent, compared to 2014. 

constructionchart

Residential construction grew by 10 percent

Within the residential housing sector, the most significant increases were projects in “condominium,” which accounted for a 45 percent increase over 2014. The condominium status refers to projects that are either high-rise condos, townhouses, villas or single-family homes located within dedicated projects that are registered as individual condominium units (filials) under the National Regulatory Law of Condominium Property.

A condominium unit in Costa Rica is a subsidiary property that is separate from the primary entity (the condominium), with its own registered legal status for the purposes of taxation, regulation and liability. When a condominium is purchased in Costa Rica, the new owner is subject to all the regulations of the individual condominium association.

The primary concentration of new construction projects in 2015 were in the province of San José, with a total of 3,049,237 square meters of construction, which represents a third of the total accounted for. Following San José with the most growth was the province of Alajuela. Outside the greater metropolitan area of San José, an additional 3,936,810 square meters of residential construction projects were registered in the rest of the country, which was an increase of 10 percent over the previous year.

Commercial construction grew by 31 percent

With respect to commercial construction, including storefronts, office buildings and shopping centers, the construction growth increased by 31 percent over the previous year, for a total of 2,024,784 square meters of registered construction.

Private construction projects increased by 83 percent in 2014, and 87 percent in 2015, while public works projects decreased by 15 percent in 2015 as compared to 2014.

If this growth is to continue during 2016, it will be necessary for the government to increase public works projects, maintain favorable bank lending policies and implement more flexible construction permitting procedures.

Tom Rosenberger has lived and worked in Costa Rica for 23 years, inspecting land, homes, condominiums and commercial buildings for clients who want to purchase existing property or build in Costa Rica. Contact him at tom@CostaRicaHomeBuilder.com.

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