There is no doubt that Costa Rica Real Estate market will be impacted to some degree on what has happened last week. That came right out of left field.

Since their is no mortgage crisis here and our Country is not tied to the major USA financial institutions, we stand a good chance of weathering this storm quite well, in fact better than others. We need to focus on good Costa Rica Real Estate value for our clients. (that applies to all price ranges)

In case you didn’t see this article from our Tico Times, I have published it for your viewing.

Special to The Tico Times….. also read below this article on value in Costa Rica

As world financial markets whirled from the latest crises in the U.S. lending and insurance sectors, Costa Ricans’ recent eschewing of Wall Street troubled sectors appears to have paid off.

Following Monday’s bankruptcy filing by investment bank monolith Lehman Brothers then Tuesday’s near demise of insurance giant AIG, stock markets in the U.S., Europe, Russia and Asia dropped to decade lows as central banks funded billion dollar bailouts.

Costa Rica, meanwhile, was calm.

“The Banco Nacional doesn’t have any investments with Lehman Brothers,” says Violeta Fernández, the bank’s corporate relations director, underlining Costa Rica’s financial independence.

Some international banks linked to Lehman have recorded multi-million dollar losses.

“Costa Rica is lucky,” says Rudolf Lucke, an economist at the University of Costa Rica. “We’ve been slow to get involved in the American stock market, and that’s why we’re not in this hurricane. Chile, Argentina, Brazil and Mexico will be more affected. They’re much more linked to America’s financial market.”

Eric Vargas, strategy director at Aldesa, an investment consultant firm in Costa Rica, says that he has steered investors to more low-risk, long-term investments like Procter & Gamble, Colgate, Wal-Mart and U.S. treasury bonds.

“Since the credit crisis began in August 2007, we’ve been advising our clients to stay away from American financial stocks,” Vargas says.

Lucke is also realistic. “The possibilities are very high that certain Costa Rican institutions have investments related to Lehman. But that’s not something you talk about,” he says.

On Tuesday, the Costa Rican Stock Exchange (BNV) rose 0.34 percent. “We haven’t seen a direct reaction in the BNV,” confirmed Silvia Zúñiga, the press secretary at the BNV.

“The BNV is affected more by the domestic interest rates than by the American stock market,” says Lucke.

“One possible consequence of the crisis will present itself if international investors abandon emerging market debt (EMD) bonds for more stable instruments,” predicted Zúñiga. EMD bonds are issued by companies in developing countries, like Costa Rica. They are traded on the BNV.

Second round effects of the bigger markets’ troubles, however, are inevitable. Costa Rica’s economy depends largely on North American investment, trade and tourism. The U.S. is Costa Rica’s No. 1 market for exports.

Domestically, the lending market has never been very liquid, but now, as the Central Bank tweaks the interest rate to catch up to an estimated 15 percent inflation – the highest since April of 1997 – borrowing money is expensive.

Yet a conservative monetary policy may have saved Costa Rica from the speculative lending crisis in the United States. Here, stringent limits have been set on the amount of money banks can lend in proportion to their reserves. Costa Rica’s federal reserves, for example, total about $3.9 million. This is the highest they’ve been since December, when they were at record levels.

Vargas expects to see even more spending paralysis. Currently, domestic interest rates are lower than inflation. Consumers feel they are better off spending their money than saving it. This can create inflationary pressure that, coupled with an undervalued dollar, leads to more importing than exporting. This threatens the Central Bank’s reserves. The Central Bank’s reserves diminished about 20 percent in the last five months. Foreign direct investment – fast becoming a precarious last resort – had helped fill this gap.

Vargas envisions higher interest rates and an adjusted exchange rate, measures that might help bridge this discrepancy in the long run but will likely have short-term malignant effects, like a recession.

“It’s cleaning up everything that was wrong in a very harsh manner,” says Lucke of the financial crisis.

 Costa Rica Retirement is still a very viable option for many countries in the world. People are going to be very selective in their purchasing in that they now have models at home of what can be deemed opportunity properties and serve as a guide as to what they feel is a good deal in Real Estate in Costa Rica. Further, if it is owned by a Bank in the USA, they probably can make their own deal.

We have excellent Costa Rica Real Estate value here but one has to know where it is.

There are many things that combine to achieve value. A lot of buyers look to the surface and go no deeper than the price. Others are caught up in the hype that they have to be careful or you are going to loose your shirt here. Losing one’s shirt usually only happens if you take short cuts. There is too much marketing play on this based on stupid experiences of greedy people in the past.  They have stories that rival the Titanic.  In a lot of these cases they never needed to occur in the first place and usually are associated with greed, lust and not adhering to practices used in their home country.  No need to go  into detail on these cases here as I am sure you can guess the profile.

We are not living in the stone ages here anymore and if you put yourself in good hands with a good Costa Rica Real Estate firm , outline clearly your objectives and state your level of interest in real value not just price, you won’t go too far wrong.

I personally feel we are going to have to be patient and see where things are heading. Markets are dictated by the perception of the buyer, not what people build and make pretty thinking it will sell for that reason.

Admittedly, we have a lot of projects that do not have the professionals to do the proper studies before the planning. These projects could succeed in spite of themselves in the past. They are going to meet with some serious competition now and if the amenity doesn’t match up to the price, then you may see some of the claimed serious discounts in price that people have mentioned. That still doesn’t mean they will sell if they are not what the market wants.  You are probably not going to buy something that doesn’t come close to you personal and lifestyle needs.

I see projects advertised at so called discounts now that fail to meet the criteria for the Retirement buyer or even the investor. These can be dangerous endeavors. “If it looks like a duck“

Be wary of the  construction for $50 per foot if you are leaving a beautiful $400,000 home in the USA or Canada that was built for $275 per foot. Value?  I don’t think that is you.  Look to $85 in this case.

There is a lot of Costa Rica Real Estate underway  that is looking to do pre construction sales. The buyer today  is going to be conspicuously absent in the coming months unless he can see proof of completion of a project or unless the money goes to Escrow until he is satisfied.

Value is not hard to find if that is your business.

One project we are involved in is kicking off in November despite all the gloom we hear,  It is offering a nice mountain community in a great location with killer ocean views and amenities. However, it is fully funded and will only take Escrow deposits to reserve a home site and you don’t pay anymore until the water, paved streets and electricity are at your property.  That is my idea of not losing your shirt and good value.

That is what we feel comfortable with these days.

 This article was reported by Jo Stuart  of AM Costa Rica and is a very accurate good guide for costs of  living in Costa Rica.  It did not include some Costa Rica Real Estate benefits such as annual taxes which are very low as well.  A home in Cariari that is valued at $450,000 can be as little as $250 per year.
Pleas read on for all details of cost of living in Costa Rica by AM Costa Rica.

 As the belts are tightened in the United States and elsewhere, more eyes turn to Costa Rica as a cheap place to live.

The first question usually is what is the cost of living there. And there is no easy answer.

Retirees range from the person squeaking by on $700 a month in U.S. Social Security to someone who can write a check for a $450,000 oceanside condo.

But those short on funds usually want to know how low can you go.

Because Costa Rica is a socialist country, great attention is paid to the costs of public services. In simple terms, they are a steal. And they will continue to be.

Want a cell phone? The Instituto Costarricense de Electricidad will charge you a base rate of 3,375 colons or about $8.10 a month. A land line will cost 3,220 colons or $5.88 a month.

Basic Internet hookup can be had for 8,350 colons a month or $28.25. But then there also is the charge for using the telephone to connect to a server.  The alternative, a cable hookup, can cost about $18 for basic service which usually is sufficient for one household. And there is an obligatory purchase of cable television. The price also depends on which company has the service contract for the specific geographical area.

Columnist Jo Stuart frequently mentions prices in her Friday column. She also is an astute shopper at the various weekend ferias where vegetables and other agricultural products are sold far below supermarket prices.

Even in the supermarket, some products are price controlled. Milk is 1,430 colons a gallon or $2.61.

Those who simply have to have imported U.S. goods will pay handsomely. They shop at Pricesmart.

Jo Stuart also notes that the best seats in the Teatro Nacional for a major orchestra performance can be just 8,000 colons or about $14.60. But she usually goes a little higher in the building for a whole lot less. The cheap seats are 3,000 colons ($5.50) and all tickets are subject to a 10 percent discount for senior citizens.

The ciudadano de oro card is accepted universally and can mean deep discounts. To get one, an expat has to have a pensionado, rentista, inversionist or residencia cédula.  

The government has decided to dispense with the bus coupons for the elderly. They were subject to resale and caused a lot of woe. So shortly seniors will simply have to show an identification specifying their age, including the ciudadano de oro card, to get a discount.

The bus fares are a steal to begin with. The fare from San José to Tamarindo on the far Pacific coast is 3,055 colons or $6.23. That’s nearly an all-day ride. And in the city few routes are more than 250 colons (about 45 cents).

Taxis also are a deal, although recent increases have Costa Ricans unhappy.  The first kilometer of a taxi ride is 420 colons or about 77 cents. Additional kilometers in the city are still 380 colons (69 cents). Those are definitely not New York City prices.

There are the apartments. Even after paying the informal tax levied on those who do not speak Spanish well, a decent two-bedroom, secure unit can be had for $450 a month. An A.M. Costa Rica reporter just vacated a one-bedroom with loft where the rent was $275 a month. And this was no slum.

Electrical and water bills are designed for the low-end user. The Compañía Nacional de Fuerza y Luz rates favor low use. The current rate is 43 colons (8 cents) for each kilowatt for the first 200 kilowatts of use. Each of the next 100 kilowatts is 66 colons (12 cents). Larger consumers pay more per unit.

The government water company just got a 25 percent overall raise but the actual rates have not been set yet. Company officials promise to favor low users.

Then there is free. Like nearly all the country’s beaches from high water to 50 meters inland. And the parks. And frequent entertainment.

Again, prices and use of utilities depend a lot on where the expat lives. Air conditioning can add a lot of an electric bill. So can alcohol or cigarettes. Remember, socialist countries like to control your bad habits.

Beer is about 800 colons a can, about $1.45. Local beer is cheaper by the two-liter bottle, but still it is no bargain.

On the other hand, a glass of decent Chilean or Italian wine in a four-star hotel restaurant will cost between 3,100  and 3,500 colons (from $5.66 to $6.39). Better to buy by the bottle (4,000 to 6,000 colons or $7.30 to $10.95) except for infrequent sprees.

Bars that cater to expats will reflect that in their beer prices where 1,200 colon beer means nearly $2.20 a bottle.

The big ticket items here are automobiles because the government levies a gigantic tax. So an expat can figure paying twice for what a vehicle costs in the States. But the insurance is very reasonable, again based on coverage and type of vehicle. But $100 a year is possible.

A lot has been said about the Costa Rican health system. And one must accept the fact that most U.S. medical benefits do not extend outside the States. An exception is the health plan for retired military and some federal employees.

Patients in the government system probably do not have their own assigned physician. And the waits are legendary.

However, older patients of the ciudadano de oro category usually get to go to the head of the line. Expats find they can obtain very reasonable health insurance from the only provider, the Instituto Nacional de Seguros.  Some group plans reduce the cost even more.

Costa Rican employees are covered because the Caja Costarricense de Seguro Social takes 10 percent of their gross pay as a salary deduction. Employees add to the total.

Baby Boomers can look to the future for a more fulfilled life by getting with a program.

Costa Rica retirement has much to offer. Many amenities relative to the Baby Boomer exist here and offers the opportunity to keep the mind and body active while enjoying the lifestyle, people and country. We are blessed with fine universities that have excellent classes for almost anything one could desire for extra education.

Successful aging is not a myth  – Baby Boomers can learn to age well.
Behaviors and learned elements can add healthy productive years to our lives

Healthy older brains are better at dealing with complex situations that you have dealt with for many years, having the benefit of so much experience. Research also suggests certain predictors of how well an individual in mid-life is likely to age.

Naturally some things need to be present such as:
one has to avoid substance abuse; a good stable marriage is helpful; education and ongoing reading; brain work; exercise, normal body weight; and a positive attitude to wards life. Baby Boomers who exhibit these characteristics have a greater likelihood of aging well.

Education is more than university degrees earned ages ago. It is an ongoing interest in the world around you, reading newspapers, books, and other sources of information and awareness.

One must keep it active
occupy the brain- whether it involves reading or writing, attending lectures or taking classes, playing bridge or chess, or doing crossword puzzles – exercises the brain and makes it more resilient. It also strengthens the immune system. Also, mental and physical exercise increases feel-good hormones.

We are never too old to learn, and under normal circumstances, we can continue to learn nearly as long as we live.

Costa Rica offers some of the best fitness centers and educational programs anywhere. One example is that If you become a member of the Cariari Country Club you will experience a world of activities that include championship golf course, tennis, swimming, fitness center with trainers and more in this large complex.

A real boom for Costa Rica development projects

High speed INTERNET and VOIP have long been a shortcoming for a large number of Costa Rica development projects. This new arrangement with Gilat Satellite Networks Ltd. will clearly change the profile of our clients seeking Costa Rica retirement. It also opens up the market to people whose business is done parley by INTERNET such as traders, researchers etc.

How long this will take to get into place is not certain. Please read on for details.

Costa Rica’s National Telco Selects Gilat’s SkyEdge Broadband Satellite Network
?? VSAT Platform Will Bring Reliable Telephony and Wireless Internet Access to Rural Citizens

Gilat Satellite Networks Ltd. (Nasdaq:GILT) today announced that it has been selected by Costa Rica’s national telecommunications operator Instituto Costarricense de Electricidad (ICE), to provide a Gilat SkyEdge broadband satellite communications network that will serve end users throughout Costa Rica.

ICE will use the new VSAT network to expand its programs to provide toll-quality telephony to rural citizens, meeting its Universal Service Obligations. The network will also provide satellite backhaul for wireless Internet access to those citizens. Using this mix enables the service provider to benefit from the advantages of each technology – satellite’s nationwide reach and wireless’ cost-effective, “last mile” access.

ICE is a long-standing Gilat customer, having deployed Gilat VSAT networks nationwide since 2005.

“After evaluating competing VSAT offerings, we determined that Gilat’s SkyEdge has the high performance and compelling economics that make it ideally suited to expand telephony and Internet access to all our rural communities,” said ICE Ing. Edgar Hernandez. “In the past, Gilat has demonstrated a very high level of commitment to customer support and a solid track record for providing superior telecommunications services. These attributes will help us serve the needs of our citizens in an efficient manner.”

Russell Ribeiro, Gilat Network Systems’ Regional Vice President, Latin America, said, “Continuing our relationship with ICE helps us bring the most efficient, dependable communications systems to the citizens of Costa Rica. We are proud to once again demonstrate our ability to meet the critical voice and data connectivity requirements of the world’s rural communities.”

Gilat’s SkyEdge is a satellite communications system that delivers high-quality voice, broadband data and video services over a powerful unified system. SkyEdge represents Gilat’s extensive knowledge base and field-proven product offering, acquired through two decades of experience. SkyEdge’s flexible architecture and efficient space segment utilization make it an ideal platform for operators and service providers.

About Instituto Costarricense de Electricidad (ICE):

Costa Rica’s national telecommunications operator, Instituto Costarricense de Electricidad, (ICE), offers fixed and mobile telephony as well as data/Internet communications. ICE is a government entity that has distinguished itself in Central America as a leader in the development and implementation of new technologies. It offers a wide variety of services in Costa Rica and has several technological platforms that allow it to diversify the service options for its customers, both residential and corporate. For more information visit www.grupoice.com.

About Gilat Satellite Networks Ltd.

Gilat Satellite Networks Ltd. (Nasdaq:GILT) is a leading provider of products and services for satellite-based communications networks. The Company operates under three business units: (i) Gilat Network Systems (“GNS”), which is a provider of network systems and associated professional services to service providers and operators worldwide; (ii) Spacenet Inc., which provides managed services in North America for businesses and governments through its Connexstar service brand and for consumers through its StarBand service brand; (iii) Spacenet Rural Communications, which offers rural telephony and Internet access solutions to remote areas primarily in Latin America.

Gilat was founded in 1987 and has shipped over 670,000 Very Small Aperture Terminals (VSATs) to more than 85 countries across six continents. Gilat’s headquarters is located in Petah Tikva, Israel. The Company has 16 sales and service offices worldwide. Gilat markets the SkyEdge (TM) and SkyEdge II Product Family which includes the SkyEdge Pro, SkyEdge IP, SkyEdge Call, SkyEdge DVB-RCS and SkyEdge Gateway. In addition, the Company markets numerous other legacy products.

The Municipality of Jaco, in cooperation with the Central Pacific Chamber of Commerce and the Association Procultura y Desarrollo de Jaco beach, launched its promotional campaign called Jaco Land of Adventures and City of the Surf.   Jaco’s Mayor, Don Marvin Elizondo, members of the city council and the chamber, representatives of the Federation of Surf and members of the community were on hand last week for the kickoff of this campaign. Jose Ureña, President of the Federacion de Surf de Costa Rica talked about the importance of the Billabong 2009 World Surfing Games that will be held in the central Pacific in Playa Hermosa July 31-August 9.  Last week, the Municipality held an extraordinary session to talk about the necessities of the community of Playa Hermosa in preparation for next years World Surfing Games.  Better lighting for the streets, more trash cans, more security measures, more water hookups and reparation of the beach accesses were among the topics the Vecinos de Playa Hermosa asked to discuss.  Local business members and residents alike were in attendance to begin the process of preparing for the event.  This event will be one of the largest ever held in Costa Rica.

This is not going to hurt the Costa Rica Real Estate market. Playa Hermosa is one of the finest surf beaches anywhere.

As you may be aware, there has been a lot of speculation about prices being slashed due to the impact of the slowing USA market. 

It seems one has to distinguish the projects before making this observation just yet.

If a project had been dependent on bank financing or client financing through pre construction payment plans, who knows what kind of deal a project would make to keep things moving forward since our central Bank put a hold on construction funding to cool us off. However, a discount in this environment may lead to disaster in the end no matter how much it is.  There is a big difference between 50% off ( a good deal for the buyer) and a destitute project.

While we are watching how the impact of the US market is going to play out in Costa Rica, we are very cautious these days (for the fore mentioned reason) to include only  projects we  deem solid for our Property Scouting Tours .

Please read the report offered directly from the owner and President of Del Pacifico, a Costa Rica central Pacific project. We have been marketing Del Pacifico since they began.

I feel we need to wait and see how the better Costa Rica Real Estate projects fair in this slowdown before we jump to conclusions about fire sales.  Having said that, I am still convinced that even the best funded projects are going to look seriously at any offers these days as it is definitely slow.

We just received the following report directly from the president of Del Pacifico, one of our very large  projects that we market in the central Pacific.

Things are going gangbusters at Del Pacifico…..We now have over 260,000 square feet of construction either completed or underway! We have also sold 75 condos, houses and lots. There are over 100 people at work at Del Pacifico, but because a lot of the construction action is away from the highway sometimes it hard to see exactly what we’re doing. So here’s a quick update of what we’ve been up to in the last 45 days or so:

From a realtor’s perspective, sales and inventory are the most important topics. Let me say, as an overview, sales are quite strong and we have received 11 contracts or reservation for condos, townhouses, and lots in July and August. Even more importantly we have been raising prices, not lowering them.

Since sales have been strong, our available inventory is tight. In fact, we have only two of the 2 bedroom townhouses available and two of our 3 bedroom units. We also have only 10 of the La Prada town Center units available. The current pricing for these starts at $275,000 furnished. Of special interest might be the one “loft unit” which is available at $295,000 furnished.

Since we are nearly sold out of the three bedroom units, we have started a reservation list for our next phase called “The Portofinos”. These will be the same floor plan as the “Villas” but will be priced somewhat higher with prices starting at $300 per square foot. The last 5 units of the Villa Del Pacifico project sold at $550,000 furnished and a recent private resale of a front line unit has been reported at $650,000.

Here is a discount in our opinion - A currently re sale at Del Pacifico that is a luxury 3 bedroom condo with ocean view for sale at $485,000, which according to the inventory and recent sales is way under market. This the same one that is referenced above for $550,000 furnished.

For further information on Del Pacifico, please feel free to contact me, Robert Shannon at 1 888 581 1786.  Take one of our very thorough Property Scouting Tours and see where the best deals are in Costa Rica Real Estate.

For years more than 10 years on and off I have held Costa Rica Bonds and have been very pleased. I felt I should post this as it is encouraging to read this coupled with a previous post whereby Moody did an upgrade.
BEIJING, Sept 12 (Reuters) – China is secretly spending $300 million of its currency reserves to buy Costa Rica government bonds to reward the central American country for cutting diplomatic ties with Taiwan, the Financial Times reported on Friday.
The FT said it had obtained documents related to the deal after La Nacion, Costa Rica’s largest newspaper, won a court case a week ago Friday and a judge ordered the government to release the information to the public.
The State Administration of Foreign Exchange (SAFE), which manages China’s $1.8 trillion of reserves, promised to buy the bonds under the terms of a 2007 agreement whereby Costa Rica recognised China and cut links with Taiwan, which Beijing regards as a renegade province.
SAFE included a clause demanding Costa Rica take “necessary measures to prevent the disclosure of the financial terms of this operation and of SAFE as a purchaser of these bonds to the public”, according to the documents seen by the FT.
China’s Foreign Ministry said in a statement to the FT that the bond purchase and the related procedures abided by international business rules and conformed with related laws in China.
China bought the first $150 million of the bonds in January and is due to buy the second lot next January, the paper said.
It said SAFE, which does not comment on its investments, had set up a wholly owned subsidiary with registered capital of just HK$10,000 ($1,280) to receive interest payments on the bonds.
The disclosure comes against a background of concern among Western governments about a lack of transparency in the way some emerging markets’ sovereign wealth funds and central banks are investing their growing stockpiles of reserves.
SAFE has also quietly bought small equity stakes in a clutch of British blue-chip companies, according to recent media reports in Britain and China. The stakes are too small to require regulatory disclosure.
Beijing set up China Investment Corp last September and handed the sovereign wealth fund $200 billion of reserves from SAFE to manage separately.
Two-thirds of that sum represents money already invested, or earmarked to be invested, in domestic banks and other financial institutions requiring new injections of capital. (Reporting by Alan Wheatley; Editing by Ken Wills)

Often, people tend to view Costa Rica with tunnel vision and as a result the reports we read are often tied to the Costa Rica Real Estate market only.

There is a whole world of things that drive the visitors to Costa Rica such as industries relocating here, medical care, dentistry care, cosmetic surgery and the Costa Rica retirement market generally. You just have to look under the stones and you will find this is a thriving country that boasts a true middle class, excellent education system and one of the best health care systems in the world. Please read on and see what the prominent Al Dia newspaper has to say.

Al Día Newspaper – San José, Costa Rica – September 7, 2008

U.S. Television networks like CNBC and ABC and Internet sites extol the virtues of Costa Rica and the affordability of its health tourism and real estate investments. The high cost of medical procedures in the U.S. are the best ally of Cost Rica. Most operations cost sixty percent less in Costa Rica than they do in the States. ABC’s 20/20 recently did a report on women who come to Costa Rica for Cosmetic surgery. The Discovery Channel also aired a similar program.On the CNBC program “In the Money,” it was stated, “Costa Rica is a democracy of four million friendly people. Home of the hottest real estate market in the world.”

Furthermore, Costa Rica is known worldwide as a destination for high tech companies. According to the World Bank Costa Rica is the fourth exporter of high technology in the world and first in Latin America. More than one hundred and fifty multinational companies, among them world leaders, now operate in Costa Rica. Costa Rica’s highly educated work force and political and economic stability have made all of this possible.