Sunsets in Paradise

Rarely do we think about how currency exchange rates affect our daily purchases. Even though the USD has lost around 11% globally over the past six months, it remains at near record strength (580CRC – 1$) in Costa Rica. The fluctuation of the US Dollar has a real impact for buyers of big-ticket investments like Costa Rica real estate. The largest beneficiaries of the recent currency moves are Canadians and Europeans whose currencies have recently experienced dramatic gains against the USD.

The broad appeal of Costa Rica continues to keep the real estate market stable, which is confusing for most Americans because they reside in a plunging market with tiny interest rates. In other words, we have witnessed more “price shock” as of late from American buyers. However, the continued strength of the dollar and the lower cost of living generally still allows Americans to live more comfortably on less income in Costa Rica.

The increased strength over the last 6 months of the Canadian dollar ($1.03) and the Euro ($1.49) against the USD is creating a prime window of opportunity for Canadians and Europeans to snatch up Costa Rica property at good values.

USD-CAD 6-month Chart

Since most properties in Costa Rica are listed in USD or CRC (colones), it is easy to see the current savings. In March 2009, $1.29 Canadian dollars equaled $1US. This means a Costa Rica home priced at $300,000 US cost a Canadian buyer $387,000 in Canadian dollars. That same home can now be purchased for $309,000 CAD, a real savings of $78,000 CAD.

Euro - USD 6-month Chart

Europeans seeking a home in paradise will also be smart to purchase now while their currency is strong. Had a Euro-buyer bought a $300,000 home in March, they would have paid around €236,000. Today Europeans will pay only around €202,000 for the same home – saving €34,000 (or $50,660).

Views from Atenas home for sale

Although real estate prices have remained stable in Costa Rica, some sellers are more motivated than they were a year ago. Incidentally, this heightened seller motivation coupled with the strength of foreign currencies has made this autumn and excellent time to acquire Costa Rica real estate assets.