Road Improvement in Costa Rica

It cannot be ignored these days that almost everywhere you look there is road construction in Costa Rica. And not just in San Jose, but all over the country. President Arias made improving the infrastructure of Costa Rica a major campaign pledge. And unlike most campaign pledges, this one is actually being fulfilled. Let’s examine some of the areas where construction could have a significant impact on real estate prices.

Construction in General

Tourism has become the biggest economic factor in Costa Rica. And for good reason as this country offers some of the most incredible natural beauty of any on earth. Tourism industry growth generally leads growth in development and increases in real estate prices. This phenomenon is certainly taking place in Costa Rica this very moment. As the infrastructure improves, drive times between tourist locations, as well as safety, will improve as well. This can only leads to greater increases in the tourism market, which already is one of the fastest growing international markets in the world. With increases in tourism, which have no foreseeable end in sight, increases in development of tourism related real estate will also increase leading to higher prices. Moreover, the trend of tourists returning to buy and even live in Costa Rica will also increase. These factors should keep the real estate market strong in Costa Rica for years to come.

Let’s look at some specific examples of improvement…….

The Costanera Highway

The highway I am referring to is the one that extends from Jaco all the way south to Parmer Norte. It is the only real costal highway we have. The road has been traditionally well-maintained from Jaco to Manuel Antonio with the exception of two atrocious bridges on either side of the little town of Parrita, about 15 minutes north of Quepos. However, those bridges as we speak are being changed for better and bigger ones! Upon completion it will make the trip from Jaco to Quepos much quicker and also be a boost to the many developments going on in the area and to property values in general. One example is the Del Pacifico development in Esterillos. Upon completion this development will also include an 18-hole golf course (Billy Casper design) and a commercial center.

Possibly the worst stretch of road in the entire country is the dirt road that leads from Quepos to Dominical. Anyone who has ever had the good fortune of driving this road at night in the green season knows the horror. It is probably the busiest stretch of non-paved road in the country. Driving at night enveloped in a cloud of dust on this bumpy road is a teeth chattering experience that can lead the most patient and calm among us to loose their cool. Well this road is under construction as well. I like to divide (at least mentally) this nightmarish road into two distinct sections. The first is the section from Quepos to Matapalo (a charming little beach village halfway between Quepos and Dominical). This section of the road seems to be getting the most focus and may indeed be completely improved in the next couple years. There are many developments along this road that could benefit nicely. One that is mentionable is Hills of Portalon, which offers single family lots with nice views of the Pacific on one side and mountains on the other. Most lots are a couple hectareas in size (or about 5 acres) and range in price form $200,000 to $300,000. The other part of this road that extends from Matapalo to Dominical is another story and in my opinion it will not be improved extensively for the next five years. With all that said, it is only a matter of time before this 40 kilometer stretch of unimproved road will be completely paved and therefore now is the time to take advantage of what will surely be a boom in real estate prices over the next five to ten years in this area.

One reason I believe that it is only a matter of time is because once you reach Dominical, the balance of the Costanera is probably the newest, best marked and smoothest rides in all the country. It simply defies logic that 40 out of the some 200 kilometers of the Costanera would remain unpaved forever, especially in light of the current administration’s emphasis on attracting foreign investment into Costa Rica. The recent adoption of the CAFTA (what we call here the TLC) lends even more weight to that prediction. The fact that Costa Rica is attracting big money from the U.S. and other developed countries will only put more pressure on the government to act.

Caldera Highway

The long-awaited Caldera Highway may finally be in the works. However, on this one I would not hold my breath. Yes property values in the areas around this highway as well as its destination would get a benefit were this road to ever become a reality. But the reality of that ever happening, well who knows? Below are excerpts from an article that appeared in insidecostarica.com on August 30, 2007.

San José-Caldera Continues Stalled

The construction of the San José-Caldera will continue stalled as representatives of the banks financing the project and the construction company have yet to reach an agreement and as such the government is extending the start of construction date while the two parties continues negotiations.The project has been in the works for the last two decades and recent starts were stalled or halted as the government and various constructions awarded the contracted came to a stalemate. The latest round of stalls is just another in a long list of stalls and stopped work.Karla González, the current minister heading the Ministerio de Obras Públicas y Transportes (MOPT), assures that the work will commence before the year is over. Notwithstanding, the minister, said that the government has to respect the process and the requests made by the creditors of the construction company.The San José - Caldera project is only 77 kilometers from an idea that began three decades ago to build a highway that connects capital with the Pacific port town of Caldera.The road weaves through Santa Ana, Cuidad Colon, Atenas and Orotina and would cut travel between San José and Caldera to less than one hour from the current almost two hours.
The completion of the San José-Caldera will also greatly reduce travel to Jacó and Quepos/Manuel Antonio, as the highway intersects with the Jacó exit at Orotina, reducing San José - Jacó travel to less than 45 minutes rather than 90 plus minutes it takes now.

The Bottom Line

The above mentioned projects are only a few of those that are underway in Costa Rica. The bottom line is that Costa Rica’s roads are improving rapidly and real estate prices climbing as a result. Better to get in before the dust clears from all the road building equipment that is currently making driving in Costa Rica as miserable as ever!

Happy Driving and Investing and as always, Pura Vida!