Diego Mendez Arce
The Real Price of Building a House in Costa Rica
Updated: May 19, 2022
Before you scan this post like an eagle looking for a magic answer/number I will recommend you to hold your horses and finish reading the blog or you will not really know what the real price of building a house in Costa Rica is. You see, prices in the Architecture-Engineering-Construction (A.E.C.) industry are not like in other industries where you just multiply the given price times the magnitude to be purchased, this is a common misconception worldwide and Costa Rica is no exception.
For 2022 the average price per s.q.m. of construction for a house in Costa Rica ranges from $823/m2 to $1379 m2 ($76ft2 to $128 ft2), from the minimum that I consider to be acceptable all the way to a high-end house. That range is what any reputable architect or builder should give you now a days including me, but what they won’t tell you is that this is not what you’ll pay in the end for the house after you move in, and there is a very important reason for that. keep in mind that this range applies only to the most common concrete style homes in Costa Rica, (building typologies VC04 all the way to VC07, look at the source at the bottom) there other homes above and below this ranges but for the sake of staying focused I'm only gonna talk about this ones, any comparison to this building typologies with other different building typologies is irrelevant and pointless for this exercise.
There is a couple of things I need to break down to help you understand this complicated predicament of pricing constructions, or as I call it at the office, understanding the dark side of the force in construction. First of all, unlike a phone or a shoe, where the product moves along the production line in the beautifully controlled environment of a factory, in a construction process the end product stays put and the means of production revolve chaotically around it. Because of its nature, construction is very contingent on the site variables, such as weather, soil, topography, location, material availability, building technology availability, local labor skillset availability, and many more. Additionally, and more importantly almost every house has high degree of customization that involves a great number of fragmented processes and professionals that participate in the design and construction of a house and therefore the whole process has a very poor record of traceability.
Generally speaking, the full cost of a project is divided into three comprehensive stages that I defined:
Concept Stage Services
Planning Stage Services
Construction Stage Services
Typically, the concept stage is comprised of the preliminary design fees obviously and the preliminary studies, some of the preliminary studies such as the soil boring tests, are performed by specialized companies and can be done on the client’s request, the designer’s request, sometimes they are requested at later stages when it’s too late to make design changes, and in the worst cases nobody even requests this type of studies. As a general rule no one includes the price of this specialized studies as part of a price/m2estimate. Then comes the planning stage services with the ubiquitous construction documents, or the blueprints if you’re old school, and some other additional services that some professionals include and some don’t such as the construction program, general budget, detailed budget, bidding and construction permits. Almost no one includes the permits as part of their fees.
So, at this point, after stages one and two you’ve spent between 7% and 15% additional to that price/m2range for honorary fees, 2,54% on construction permits and somewhere between $2.000 to $4.000 on preliminary studies, and let’s assume you don’t need environmental viability permits which could easily be another $10.000 or more depending on your project requirements.
Let’s also assume your house is about 250m2(2.691ft2) of fully enclosed space and after the last stage of construction services when your house is built your range is actually $939/m2 to $1573/m2 ($87/ft2 to $146/ft2), This is of course assuming that the construction process will work like a perfect swiss watch, there will be no extras and no unexpected costs but according to a Global construction survey from 2015 by KPMG (look for the source at the end), 31% of construction companies managed to come within 10% of the planned budget, and only 25% of the projects came within 10 of their original deadlines. Consequently, I would advise to at least allow for a 10% margin on your price range than will give you your final result of $1.021/m2 to $1.709/m2 ($95/ft2 to $157/ft2).
Now that you know all of this, you have knowledge, knowledge is power, and you know what they say, "power comes with responsibility", so I will teach you how to use this price/m2 estimates. Whenever you talk to a builder you should compare only the first range I gave you, $823/m2 to $1379 m2 ($76ft2 to $128 ft2) because this corresponds to the construction costs only and when ever you talk with a design & build firm like mine use the last one, $1.021/m2 to $1.709/m2 ($95/ft2 to $157/ft2) because this includes the overall investment, but remember to always ask what's included in that estimate, and always remember it is still an estimate.
Also, keep in mind that the Russia's war with Ukraine and the post COVID economic consequences have had an impact on the price of construction materials, right now prices are extremely volatile, specially steel, therefore it has become very difficult create predictable budget scenarios in the construction industry.
Finally, you have to understand that these prices I’m giving you are estimates that have to be taken with a grain of salt. Some of the things that can have a substantial impact on your budget are soil tests and a topo survey for example, they can aid a seasoned architect create estimates that reflect with more fidelity the impact of a design on the budget, given that the architect actually has enough builder know-how to interpret such studies. It’s fundamental that you understand that there is no perfect answer, the only way to get an accurate estimate is to have an experienced professional evaluate your case, the same project on a flat plot but on different locations could have a huge budget estimate variation. There are also clever ways to bring your costs down, but they all rely on hiring the right professional that can devise creative ways to do this. For more information on designing and building a home in Costa Rica, book a virtual meeting for a free consultation here.
About the Author
My name is Diego Méndez Arce, and I am a passionate, detail-oriented Costa Rican architect with over ten years of experience in the industry. I studied at the Instituto Tecnológico de Costa Rica and The Technische Universität München in Germany. I founded Arkamos Architecture Costa Rica, a company that designs and builds homes. My team and I believe that good design feeds the human soul and has the power to improve people’s lives. We approach design and construction with a highly traceable and precise methodology to confirm that uniquely crafted residential projects are predictable in terms of scope, quality, time, and budget. I enjoy sharing my knowledge with those who are foreign to our real estate market. You can check out our blogs with different topics about design and construction in Costa Rica and its architecture here. If you have questions about how to approach the process of designing and building a house in Costa Rica, you may email me or book a virtual meeting for a free consultation here.