BOOM or BUST Costa Rica Real Estate Market 2021 🇨🇷 IMF 💰 Luxury Tax

hey guys i'm michael allen for travel costariano.com and we're so excited man this took forever to make this happen my people talking to his people he's a very busy person anyway guys i'm so happy to be talking to my good friend and real estate agent matt i recommend this guy to everybody who will listen it's hard to find i've said it many times it's hard to find or at least i think it's hard to find an honest person sometimes in the real estate game here in costa rica and when you find him you get a latch onto him and you've got to ask him a lot of questions so we are going to be talking about what's going on right now in costa rica concerning real estate we are not trying to sell you a house we're trying to give you information on what's going on in real estate in costa rica let's welcome and thank you matt for uh finally finally making the time well no thank you for having me back i was waiting for your invitation ever since i headed back from la fortuna the last time i know we were aiming to do more in-person stuff but that trip man is just a little too far for my three and six-year-old so i'm glad we could do it virtually this time so let's let's just tell everybody kind of what your region is where are you working mostly in real estate right now i'm out here in tamarindo actually currently i'm about 30 minutes south of tamarindo but really the hub in which my real estate career is based is playa tamarindo and an hour and a half north and south of that um that basically puts you everywhere along the guanacaste coast that's within an hour and a half drive of the liberia international airport and really one of the biggest expat corridors you know it includes playa flamingo playa potrero uh grande tamarindo longosta and then down to some quieter communities south avianas negra and funky all but really focusing on this you know area that's attracting a ton of expats because of not only the airport but the amenities that we have okay so let's let's just dive right into this what is the real estate market looking like in costa rica right now just to date this video a little bit we are in the middle of the pandemic so just so people understand that part of it but uh where uh what are you seeing right now in the real estate market in costa rica a lot of the dire predictions that people had last year when international borders shut down and we lost our flights coming in uh absolutely did not turn out to be true there wasn't there's a huge pause in the real estate market last year in 2020 but as soon as borders opened as of november we started to see a huge surge in demand really i think the pandemic for a lot of people was that extra push that they needed to decide to change their lifestyles costa rica had positioned itself extremely well before the pandemic started and now that you've got millions of people around the world who don't want to go anywhere near a city who don't want to be locked down who want to get fresh air out here in tamarindo we're actually seeing a real boom not as big as it was before 2008 when we were seeing a frenzy but definitely strong real estate sales over the last four months we've gone through our tourism high season that also brings a lot of real estate visitors and you've seen some crazy things happening where homes that are typically listed for six to twelve months before you get an offer are selling within a couple weeks if they're priced well uh and we're also just seeing some select areas especially close to schools and amenities that make families feel comfortable down here where property's just gone through the roof i mean you're paying really high prices to get into those exclusive gated communities that have private schools nearby and in general there's just a lot of people relocating rather than just coming for a week or two they've got a one-way ticket they want to get out of dodge and down to costa rica so is it is it about the same as pre-coded numbers or is it is it better are you seeing more activity as opposed to pre-code no i i'd actually say that it's better than pre-coven really you know if we had a graph of real estate sales that we could bring up i would describe it mostly as the covid being a pause in upward momentum uh that was already happening in our market last year at the beginning of 2019 i was saying to anne marie my wife oh my gosh this is going to be an incredible year things are going well in 17 18 and 19 you saw momentum building and then march happened the borders closed geomet available straight line to something that's more parabolic at least over the last few months or exponential because uh yeah i think that the emotion riding around the planet right now and people's real desperation to change their life is uh creating something stronger than you would in normal market conditions so are we just just for uh us rookie people in real estate is this is this considered a buyer's market or a seller's market or a little bit of boat it's a little bit of both and it's very much a geographical hodgepodge in for example let's take that exclusive gated community with a k-12 school at the gate i'm talking about mar vista outside of flamingo anywhere around flamingo right now is a seller's market like there's never been before they've got a marina coming in they have more and more people buying those boat slips and actually getting lined up to invest in the marina and right now if you own property there you can have competing offers for it uh pouring in depending on the up the marketing and advertising you're doing go down the coast uh let's say an hour and 15 minutes to a very quiet community called lagarto and it's still very much a buyer's market where sellers there now have been listing their property for a very long time and this surge in demand really has been focused in those spots where people feel most comfortable and it's still a buyer's market in quiet areas less developed places a lot of areas where sellers have been frustrated since 2009 or 2015 whenever it's been that they originally invested uh in my community in honky yall i would consider that we're approaching a balance between buyers and sellers but still because it's such a quiet place buyers do have a slight advantage um and so it's really that sort of hodgepodge where you know i'm sure up in the mountains it's an absolute buyer's market for all of these farms that are still on the market but if you want to be in prime location have prime amenities you're looking at a seller's market and if you want to get into one of those spots i would actually advise people to either wait or adjust their budget or decide to look elsewhere if they're trying to get in at a low price point because there's a lot of hype and a lot of inflation in the prices in those specific high demand areas now i'm assuming i if my emails are any indication of what's happening in with you with real estate i'm going to say that you're probably seeing people that you don't normally a lot of the buyers are canadians and from the united states but i'm thinking maybe you're seeing you're getting involved right now i think you might be booking in advance from europe and places like that we're seeing massive numbers of u.s folks canada um it's funny in the real estate world i do see canadians despite the current travel difficulties a lot of them are deciding yeah it's worth stopping in the u.s to take care of their travel arrangements and be able to legally come here because they want to buy i don't think you you would see quite as many canadian tourists deciding to do a week vacation right now because it's tough to fly down to costa rica for them right but uh yeah we're seeing really high numbers of us buyers can't excuse me canada is trickling in a little bit and europe for the moment has it's always such a small percentage of our buyers anyhow it would be tough for me to gauge whether they were back in full force um or if it was just a normal year where i only meet four or five europeans who are about to buy property here so i think you might have mentioned this what are people looking for are they looking for vacation homes or they actually are they actually looking for to come down here and live are they looking by the beaches are they looking more in inland there are still plenty of people who want vacation properties investment properties to only use one to three months per year let's say but overall the trend in our market continues to slowly move towards people who spend more time in their property if not relocating here um you would find that you know that trend has been going on for the last i don't know five to ten years where we went from investors who were speculating on you know roi properties trying to get you know the best rental units ever since 2011 we've been ticking towards people who much more want to be in costa rica and the pandemics definitely accelerated that [Music] i meet a lot of people who are choosing to come to costa rica largely because they find their home intolerable now and i think that a much higher percentage of people on every plane now has a one-way ticket than did the percentage of people who did a year and a half ago are you seeing uh what what uh retirees younger people families are you seeing any is anything sticking out for you of who's looking because you mentioned before like looking for schools and stuff so are you seeing more of a family dynamic as a because it used to be kind of come on retiree people for the most part are people with you know older with you know disposable income and stuff so what are you seeing for sure that's changing as well and it's shifting younger more families are coming down because they do have access to those excellent private schools they feel now they've especially on the family side a huge change in the mathematics of coming down here or the calculation they're doing in their head was no longer having in-person classes in the u.s canada or europe so you do see a ton more families than previously came down here because their kids don't need to be in school and in many cases they see costa rican private schools here we've got several really nice options they were the first they were reopening and holding in-person classes well before a lot of us schools and i'm also meeting a lot of parents for whom that was an absolute priority i need to get my kids back in school i hate the online thing and i was happy to hear that they've been doing in-person classes here so yeah you're you're seeing a shift towards younger folks you're seeing a shift towards near retirees where they might have five or ten years left in their career and right now they can switch to a remote work lifestyle or they switch to a remote work lifestyle a year ago and really this is just sort of choosing a new location and um yeah it's definitely not overnight that the shift is happening we are still getting plenty of retirees but more and more as things progress we're getting families um younger couples you know with or without children i see a ton of people who right now have millions of dollars of net worth from a home in california or from a home in toronto or one of these overheated real estate markets up north and they can be my age you know under 40 they're pulling out of santa monica or wherever they've lived on the western coast in the u.s and somehow they've built up incredible equity in their home up there because they bought in at the right time you know people from seattle for example if they bought 10 years ago and are now reselling you know they might be 45 and have hundreds of thousands of dollars they just earned by cashing out of their house in the u.s uh and so it's sort of it's definitely diversifying so it's not just it's not just high-end buyers it's it's kind of families may be trying to change their life a little bit in another country so i mean so are you are people asking hey i'm we're looking for like a you know not a low income home but you know a lower income than what most people consider most people think condos on the beach million dollar properties and stuff are you seeing people inquiring about maybe hey i don't want to i don't want that condo on the beach i want you know 200 000 you know yeah it's it's tough first of all for me to describe the macro trend on that side because you know i've got my listings and most of the inquiries i see are people saying hey i saw that house that you have and i want to ask you a question about it my inventory right now is an extremely hot item because people are looking for 200 000 to hundred or maybe four hundred thousand dollar properties i see a ton of people between 150 and 300 and what's happening now that's wonderful for me for me personally is just that that inventory in many areas is drying up i'm sorry we've got a cicada bloom going on in this area right now as you can probably hear um but you've seen you know in our stretch of coastline because we have the liberia airport because we have these five or six wonderful private schools in those areas the inventory that's reasonably priced and actually a good value has all but disappeared um you know where the biggest dynamic is that because this is a cash market for real estate and there's no lending available for foreigners everything is much slower and so you get you know the surge of demand that just happened over the last six months and nobody had been building homes in anticipation of right now oh there's gonna be a market for two to four hundred thousand dollar homes people couldn't predict that they didn't know that how strong demand was going to be after covid and you know it's a very risky venture when you're looking for all cash buyers to do a development in the first place so what we've done all of a sudden is you know there was all this uh very much fear in the market starting last year when the beginning of the coveted restrictions impacted us that definitely shut down construction and investment in new projects and now we've essentially soaked up most of the inventory that was sitting on the market in those high demand locations before and wherever it exists now because just the numbers of people coming down versus the number of homes that are built uh is an imbalance you're seeing people get off the plane and sort of say i need you know a house under 300 000 and pretty soon they might be even changing the area of the coast they're looking in because you can't find it up near playa flamingo right now tamarindo those tourism hubs you really have to have a substantial budget to get in there and um the inquiries i think are very much always going to be there between 150 and 300 000 and what's really just happened now is that all of a sudden we hit a wall with the inventory and if you want one of those reasonably priced homes you've got to go on a bit of a search or be willing to build buy a lot and build it yourself so uh so what are you seeing for the future is the future still bright is going to be bright with real estate well the future is extremely bright i'm happy to announce to you as i've mentioned i'm going to be starting my own real estate company and going independent i actually i am having a hard time uh hearing everything did you just say you're going to start your own real estate company yes absolutely sad congratulations man cheers somebody's doing very good i like it see honesty works man honesty pays off don't take my starting my going independent as any indication that i'm making a ton of money or that i'm excited yeah lots of people would look at our bank account balances and our credit card balances and say this is not the time you should be starting your own business but really what we see is that there are uh people coming down here that i can connect with that are gonna be exploring costa rica and in fact getting out there online with this massive brokerage and being able to be on 6 000 websites isn't necessarily as critical as being a good honest mom and pop shop in our little community and at the same time we're just ready to start putting 100 of our sweat into something that we own 100 rather than something where we're you know the lowest wrong on the ladder and everybody's getting you know a team is working and getting paid together so we're excited to launch our own venture that's going to be latitude 10 realty people can learn about it on my youtube channel by finding me but um that is so exciting man yeah it's very exciting you know you do you put a lot of hard work in this and i want you to definitely gotta say your channel where you know your youtube channel we'll put uh obviously a link down at the bottom and all that if anybody searches costa rica matt you'll run across me you know i'm focused on representing sellers in one small community where basically i've lived here for a decade and everybody knows me and then i help buyers on a wide range of the coast where i'm not trying to pigeonhole them into just buying in my little community but going through all of those communities and looking at the tourism hubs versus quiet areas and conducting that sort of search and we you know we really see that um at least for the midterm until excuse me something dramatically changes about the whole situation the travel and the world economy the strength in the real estate market is and substantial and a good you know wave to ride when you're launching your own business and so the timing is very much related to the fact that we see all of these good things happening people are coming to the coast and sort of spreading out away from those tourism hubs and not able to concentrate as much there and it's a wonderful time to be not driving quite as much but focusing more on your hometown and spending more time with your kids and wife nice hey i promised a lot of people that i would we would discuss the imf a lot of people are worried about that if you don't know what that is that's the international monetary fund i don't think people realize that costa rica costa rica has been in financial problems since almost their existence what your impression is of the you know costa rica getting in bed with the imf and you're kind of your views on that first costa rica is in bed with the imf they are you know waking up the morning after and deciding what their next step is at this point you know i think it's costa rica first of all is in a very fortunate position to be a darling of these international lenders i understand people's criticism of international lending the imf all of this stuff but it is important to understand that costa rica has been borrowing money from these layers forever yeah in the 80s you know costa rica went through a crisis where the u.s was sending down a million dollars a day just to keep the country running they had debt for nature swaps they've done basically everything under the sun to keep financing the country and providing a middle-class standard of living for as many people as possible so first of all you know it's kind of like getting worried about the imf in costa rica doing this deal is like getting worried way too late in the process of the country's formation and how things run between rich powerful countries and poor ones who can't print their own money i'm not personally concerned about it because actually uh let's put it this way i'm personally concerned about global debt about the fact that the financialization of the economy has created this fake pile of money that everybody is passing around that really doesn't represent any true value anymore that's just being multiplied at will costa rica borrowing two billion dollars from the imf is one of you know it's like a one tiny little dot in a gigantic painting by that artist who used it yeah but i think the only legit um you know that some people might think about because what comes with borrowing money is there might be a luxury tax and i think that that and that is like that is a concern because you know well first of all before we talk about that our property taxes in general still fairly low considering other places is that still a true statement absolutely i talk to people from california and i start saying well our property tax rate is zero point and they fall over freaking out hearing that it's 0.25 of the tax assessed value which is actually below what your property is normally really worth in the real world that might go up there's definite you know one of the main i think here it's going to be the luxury tax is going to be if you know 0.5 i believe exactly and that will be added on above i think it was 300 000 you know it's not applied to every single property and won't affect people who are below that threshold there are definite taxes in the pipeline um you know just can you name a country right now that is not raising taxes and trying to balance their budget given horrible mismanagement over decades of you know government access good luck the you know and so i look at things where you position costa rica relative to other countries yes taxes are poised to increase just like everywhere else we're looking at a point seven five percent tax on homes that are above a certain threshold yes in the 300 000 you know we're all facing this same international crisis i think and you know if you're living in greece 10 15 years ago they had to take some pretty crazy measures to get emergency funding on a spectrum of funding measures this is not greece this is not oh we can't we're going to default tomorrow or unless we get this cash this is the country doing its normal rounds you know every 5 10 15 years of bailing out a budget that doesn't work when all of a sudden your tax revenues take a plummet like they did last year um i wish the outlook were better in that you know maybe we would avoid taxes etc but by and large i think that two years down the road once the legislature has implemented all of the measures it's going to to boost revenue the fact is going to remain that that costa rica is still the most stable country in central america that the standard of living here is far higher than most of the other countries that they have free education free health care et cetera et cetera and yes it's it's never been a fiscal paradise or really one of those tax shelters yeah it's not a tax say costa rica is not a tax haven yeah and really you know the luxury tax come on i mean i'm not i don't want to bag on people with money but you know if you're spending a million dollars on your home or two million dollars i just got this funny feeling you probably can pay your taxes and if you can't you probably found the loophole that you don't have to because here's one thing about costa rica if they can make the laws but a lot of times they're not that all they're not great at either implementing them or making them and i'm sure i don't want to say there will be loopholes but there could be and then the global tax too we're talking about the global tax but i i'm with you i think that yes some of these things can happen but i'm still with uh i'm still holding out that costa rica's got more advantages than disadvantages you know yeah you know so yeah things are going to happen the government's been mismanaging money for a long time uh it hasn't changed me too much personally but i can understand people that have a certain amount of money uh they're not super rich but they have something where they might be concerned about you know a global tax or a or a luxury tax i do get that yeah absolutely and you know most of the people who would be the first most vocal opponents of this these taxes i think you hit the nail on the head a lot of those people aren't going to pay it one way or the other because tax evasion is such a popular thing anyway it's yes these laws will be there they're gonna affect your bottom line on a property in costa rica but if you're looking for properties with an exceptional bottom line that is only financial don't come to costa rica your bottom line here is financial plus a lifestyle improvement plus your health etc uh people never say that though it's always i don't i i understand finances and i think it is an important thing but if you're basing all your i mean that's go live in bangladesh if you want cheaper you know i mean what do you what's finances are important but man there's costa rica brings some things that you don't even think about to the table you know it is like you know that simpler like that less stress lifestyle the people all that so i mean i think that comes into play when you're it can't just be well finances no hey i'm going to go to panama i'm going to panama and really if you if you consider you know i was talking to another guy jerry about the financial change that happens in your life when you go from living in a city in the u.s and paying those taxes paying for entertainment having your nice cars your car insurance everything that comes with living in a nice u.s city and you structure your life differently to live in costa rica where maybe you don't even have a car you're shopping at a local grocery store and eating completely differently you're eating at home 10 times more often because you're not trapped in a place where you feel like you have to go out to eat just to enjoy yourself your whole financial life going from that u.s city or canadian city etc coming down to costa rica takes this positive financial shift anyway where you might have an entirely different cost of living here than you would in the us or canada and the taxes are going to be one very small part of that for the average person who moves here and that average person who moves here and the first time they hire a guy to remodel their kitchen and it costs five thousand dollars instead of fifty thousand dollars and doesn't need to complain about the point five percent luxury tax in my opinion uh that that is also my opinion too but i know people like to see this almost the celebrity is starting to sound like we're going hey man i don't i i gotta tell i don't mean to offend anybody guys i don't care if you come down here and live in costa rica at all i think i should go go where you think you need to go it doesn't matter to me i'm not trying to sell anything i'm just trying to provide and i know you do this too provide solid information and a solid perspective about costa rica and and what you said is true it's not like you've got to come here you don't have to if it's finances maybe it's not here it is maybe like a panama type of setting i don't know yeah or go sit anywhere and trade bitcoin and do something completely different this is right yeah when you come to costa rica bring the perspective wide enough that you realize what you're getting isn't just a financial scenario but really a different way of living the only thing is i wish people see you can't you can't always tell them that you actually don't know that until you actually lived here for a few years and you go wow that was a good move you know you know what i mean it's those intangibles it's the intangibles that you can't really explain to people in a sense like words don't describe some of the best attributes of costa rica in a sense yeah definitely for sure it's you know i focus on these things because it's the person i am and i'm horribly disconnected from a lot of these more affluent people who by and large got their money because they were really talented at managing it and focused on roi and all of these principles um you know i i'm sure that there are people out there who can discuss more really that the financial benefits and how you could play costa rica to benefit your portfolio but i'm more interested in inviting people and really finding clients who say yes i need a lifestyle change or um you know my family needs to find time together at a place that's not surrounded by tvs and you know infinite stimulus and that's the kind of person that i say great here's costa rica and by the way here's the tax structure matt i know you have a 10-year anniversary to celebrate i want to say congrats on that but tell everybody again hey matt's got good videos not just real estate he talked he talks about some different things so what what's your youtube channel matt just search for costa rica matt you can even go to youtube.com slash costa rica matt and i'll be there just put my hashtag into google and it'll come up i i promise you guys we're gonna always be checking in with matt it's hard to get in it's hard to get him he's very busy but every once in a while he'll he'll be on our channel i think so anyway matt thanks a lot we'll be we'll be seeing you soon i think i'm michael allen travel costa rica now.com peace guys hope it helps and that's matt from tame moringa thanks very much michael i really appreciate it you

Channel: Travel Costa Rica NOW

Views: 9,250

Keywords: Costa Rica, Costa Rica real estate, real estate market, luxury homes, gated communities, condos, family living, living abroad, living overseas, moving to Costa Rica, buying property in Costa Rica, michael alan, Travel Costa Rica NOW, Costa Rica Matt, real estate market 2021, 2021, buying real estate, investment opportunities, international living, Costa Rica life, IMF, International Monetary Fund, Luxury tax, global taxes, incentives, boom or bust, beach condos

Id: C2YsMAzcsQE

Length: 34min 41sec (2081 seconds)

Published: Sat May 01 2021