Costa Rica Real Estate

Prices of houses are frozen
Mon, Jun 22, 2009
Real Estate Buzz

In December 2008, Carlos Castro made six new homes for sale in La Aurora de Heredia Costa Rica. Four months later decided to lower the price of $ 80,000 to $ 75,000 to try to sell them faster.

Despite the discount, Castro has not been able to sell one.

Other developers have opted for another strategy: to keep the price down but the pace of construction and make deals.

According to the vice president of the Costa Rica Chamber of Real Estate Brokers, Francisco Barquero, sellers of homes are stepping up promotions to try to encourage buyers. For example, raffle a prize all buyers or eliminate the payment of legal fees in the transaction.

Demand and housing construction in Costa Rica fell in the last quarter of 2008 and continued in 2009 according to data from the Federal College of Engineers and Architects (CFIA) .. The main reason mentioned builders consulted are the lack of credit for consumers was limited by the increase in interest rates.

According to Castro, some people who meet the requirements of banks decide to postpone the purchase for fear of being unable to pay the debt before major economic difficulties.

Minor Briceno, president of Development and Construction (Deyco) of Costa Rica, explained that the difference is that before, for the same type of housing, were granted a loan to a family with an income of $ 3,500 and currently require $ 5,500 a month.

As a result, between January and April this year, with the CFIA has handled about 47% less square meters for housing is managed in the same period of 2008.

Stable and low

5.4% inputs for increased housing construction in June 2008 to May 2009. In the same period a year ago was 22.9%.

41,2% Percentage this year represent the total housing units in the building. Last year was 50.5%.

The crisis halted a growth trend in the prices of homes, whose values rose more than a year ago due to production costs and high demand caused by the facilities for obtaining loans.

However, since the second half of 2008 the prices tend to be unchanged.

One factor that helped stability was the slight decline in the price of construction materials from November 2008 until last April, as measured by the National Institute of Statistics and Censuses (INEC).

Before that, in 2007 and 2006, there were increases in the cost of materials.

Precisely for that low, when it accounted for the last 12 months, ending in May, the average increase was 5.4%, while June 2007 to May 2008 was 22.9%.

Eduardo Gutierrez, general manager of technical development, is another of those who decided to cut prices on some homes. In a condominium residence that previously cost $ 140,000, now sell at $ 135,000. Also, now only work against customer orders.

Eduardo Feoli, general manager of Eurohogar, which now has three property projects for sale, he acknowledged he also had to make adjustments to the price low, but gave no details.

Other companies have decided to maintain prices. The adjustment was made in the inventory, since few houses are built and ready to deliver.

Briceño, in Deyco, is one that took this path and since last November kept the same values of condominium housing project in San Pablo de Heredia.

A slower pace of production allowed them to lower the costs of the company, said Briceno.

For Alejandro Gonzalez, general manager of Real Estate Casamax, the bonanza of previous years attracted developers inefficient now must sell at cost price to avoid losses.

According to Gonzalez, the company maintains an efficient cost structure and therefore in its residential and Imperial Treasury sold so far this year, 75% of the 30 houses that the condominium and unchanged prices.

“The secret to real estate speculation is not sustainable at the macro-economic changes in the market, maintaining low margins with high volumes of construction,” added Gonzalez.

The firm Urban Development, which has seven projects, not their values changed in the last 12 months. CEO Guillermo Bonilla explained that as far opted to have a small inventory in each complex of two or three houses.

The prognosis for the coming months and for next year is booked. Some see opportunities like Gonzalez. For him, prices will rise due to low supply of new houses.