Costa Rica: Regulation of Profits in Construction Contemplated

The government has decided to monitor and regulate the profit margin accrued by construction companies and real estate developers.

Monday, September 22, 2014

While the Association of Engineers and Architects (CFIA) argues that "... the profit margin of construction companies in the country ranges between 5% and 40%" ... ", employers in the construction sector and developers assert that they are betting on margins of between 5% and 15%.

Given this, "... the vice minister of Housing, Ana Cristina Trejos told Nacion.com that" ... monitoring the ranges of profit margins in house sales is an option that has been analyzed. 'Regulating profits could be an option; what happens is that legally this has to be evaluated (...). Obviously, developers always postulate that their profit margins are not that high, but other institutions say that they are.'"

Regarding the profits of developers and builders in relation to house sales, the president of CFIA said that "... the minimum profit of (7% plus 5% Professional fees stipulated in the regulations) aims to ... prevent 'ruinous prices', but each developer is free to charge whatever they deem appropriate for their project. "

More on this topic

Costa Rica: Condo Building Keeps Growing

May 2014

The proportion of this type of housing out of the total square meters authorized for construction in the country went from 19% in 2010 to 23% in 2013.

A total of 1.6 million square meters have been occupied by condominiums in the last two years, 85% more than in the previous biennium.

Where, What and How Much?, Real Estate in Costa Rica

March 2012

In the past two years, land prices in the radius around the canton of Alajuela have multiplied by six.

Within the GAM (Gran Area Metropolitana), since 2010 Alajuela has been top area in terms of square meters processed, say statistics from the Association of Engineers and Architects (CFIA). That would explain the very interesting property prices in this canton.

Skilled manpower hard to find amid Costa Rica's building boom

June 2008

The Costa Rican construction industry faces a shortage of skilled manpower. The shortage, which is particularly acute on the coasts, is being blamed for overruns on contracts.

The boom in the provinces of Guanacaste and Puntarenas took local labor markets by surprise.
Companies in many cases have been forced to take on workers without the requisite skills, leading to fears that quality might be compromised.

Costa Rica construction booms despite gloom in US

May 2008

The number of building permits issued in the first quarter in Costa Rica was 11 percent up on the same period of last year, as a construction boom gains strength.

The tendency in Costa Rica is in stark contrast with the doubts being expressed over the future of the US economy, and construction industry executives say no end is in sight to growth in the sector.

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