Impact of the Ukraine War on Costa Rican Real Estate

Published on October 30, 2025 and written by Cyril Jarnias

The Impact of Global Events on Local Real Estate

The relationship between global events and local real estate markets is often closer than it appears, as demonstrated by the impact of the war in Ukraine on Costa Rican real estate.

This Central American country, often perceived as a haven of peace conducive to safe investments, now faces an unprecedented economic dynamic, influenced by geopolitical tensions thousands of miles away.

Concrete Effects on the Costa Rican Market

From fluctuations in construction material prices to changes in foreign investment flows, this international crisis is reshaping the Costa Rican real estate landscape.

This situation presents both challenges and opportunities for local and international players in the real estate sector.

Analysis of the Geopolitical Consequences of the Ukrainian Crisis on Costa Rica

Global Context of the Ukrainian Crisis and Influence on International Relations

The Ukrainian crisis, triggered in 2022 and intensified through 2025, has profoundly altered the global geopolitical balance. The halt of Russian gas transit via Ukraine in January 2025 exacerbated energy tensions in Europe, leading to persistent inflation and major disruptions in global supply chains. This crisis occurs within an international context marked by the multiplication of conflicts (Middle East, Asia), reinforcing polarization between major Western powers and the Sino-Russian bloc.

Notable Global Consequences:

• Rise in energy and raw material prices
• Increased instability in global financial markets
• Strategic realignment with the rise of new regional actors

Costa Rica’s Geopolitical Position, International Alignment, and Partners

Costa Rica historically adopts a stance of active neutrality: it has maintained no army since 1949 and prioritizes multilateralism and international law as pillars of its diplomacy. Regarding the war in Ukraine:

• Costa Rica aligned with the Latin American majority advocating for strategic autonomy from major powers.
• It generally supports UN resolutions condemning any territorial violation while avoiding direct military or economic engagement.

Its main partners remain:

• United States (primary trading partner)
• European Union
• China (rapid growth in exchanges in recent years)

Partner	Nature of Partnership	Economic Weight (%)
United States	Trade/investment	~40
EU	Trade/tourism	~18
China	Import/export/financing	~10

Possible Indirect Effects for Costa Rica

Dependence on international markets makes the Costa Rican economy vulnerable to exogenous shocks from major geopolitical crises:

Global Economic Fluctuations

• General increase in import costs (energy, agricultural inputs)
• Imported inflation affecting essential goods

Supply Chains

• Logistical delays due to global congestion
• Increased cost of maritime transport

Impacts on International Trade

Agricultural exports (coffee, bananas) are indirectly affected by these increases; conversely, some tropical products occasionally benefit from increased demand during shortages elsewhere.

Potential Impact on the Costa Rican Real Estate Market

Real estate in Costa Rica is traditionally driven by:

1. Growing interest from foreign investors (particularly North Americans/Europeans seeking political stability)
2. Tourism growth generating strong seasonal rental demand

However, in this unstable context:

Factors Favoring Relative Resilience:

• Increased international search for safe destinations: maintenance or even temporary rise in high-end real estate demand
• Reassuring local political stability for expatriates/private investors

Unfavorable or Uncertain Factors:

• Overall inflation potentially leading to a general increase in material/construction costs
• Potential decrease in foreign purchasing power if prolonged recession in their home countries

Summary list of observed/recent effects:

• Average prices in San José have increased between 4% and 8% since mid-2023 due to inflationary effects.
• Foreign demand remains strong but is beginning to show increased sensitivity to exchange rates/strong dollar.
• Some residential projects see their profitability eroded by the rapid rise in logistical/import costs.

Factor	Expected Effect	Recent Data
Material Costs	+10% to +15% depending on sector	Upward trend
Foreign Demand	Stable/slight increase	Stable volumes
Average Real Estate Price	+4% to +8%	San José / coasts

Key Takeaway
Indirect exposure to global economic consequences remains real but limited thanks to the specific “safe haven” positioning that the Costa Rican real estate market still offers to international investors seeking political/health/climate stability.

However,
the persistence or future aggravation of international tensions could weigh more heavily if it were to durably slow tourist/financial flows or provoke a major recessionary shock among its main trading partners.

The Impact of the Influx of Ukrainian Refugees on the Costa Rican Housing Market

Number of Ukrainian Refugees Welcomed in Costa Rica

Since the beginning of the conflict in Ukraine, Costa Rica has welcomed a very limited number of Ukrainian refugees, estimated at less than a hundred. Recent data on first-time asylum seekers indicate that the vast majority of refugees in Costa Rica come from Central America (mainly Nicaragua), while the reception of European nationals, specifically Ukrainians, remains marginal.

Effect on Housing Market Demand

• The arrival of Ukrainian refugees has had only a negligible impact on overall housing demand, compared to much larger flows from neighboring countries.
• No notable concentration of these refugees in a specific region has been reported; their presence is mainly diluted in the central urban area (San José and periphery), which traditionally welcomes newcomers.

Factor	Observed Impact
Arrival Volume	Low

Key Takeaway: The occasional and quantitatively marginal reception of Ukrainian refugees in Costa Rica has not significantly altered the real estate market nor generated a particular need for new infrastructure. Institutional efforts remain focused on much more massive immigration primarily from Latin America. The local social impact remains non-existent at this stage.

Geopolitical Investments and Implications for the Costa Rican Real Estate Sector

Geopolitical investments, particularly those influenced by the war in Ukraine, have notably altered the landscape of the real estate market in Costa Rica. This dynamic is explained by a set of economic, political, and strategic factors that are redefining the origin and nature of international capital flows.

Costa Rica’s Attractiveness Factors for Foreign Investors:

• Political stability and legal security
• Strategic positioning in Latin America
• Strong commitment to environmental sustainability
• Absence of a permanent army

These elements offer European investors a reassuring alternative in the face of increased uncertainty on their continent.

Recent Evolution of Foreign Direct Investment (FDI) in Costa Rica:

Year	FDI (in billions €)	Annual Growth (%)
2023	3.53	+8
2024	4.02	+14

This historic progression confirms the growing interest in the country as a strategic “hub” for capital seeking stability and sustainable returns.

Reactions of European Investors Following the War in Ukraine:

• Active search for geographical diversification to reduce their exposure to risks associated with political and military instability in Eastern Europe.
• Marked interest in stable emerging markets, from which Costa Rica benefits thanks to its green and stable image.
• Some actors, however, express reservations related to persistent global uncertainties or fear of local real estate overheating.

Origin of New Capital Flows in Costa Rican Real Estate:

Indicative list:

• European capital seeking refuge outside the eurozone
• North American funds wishing to benefit from regional dynamism
• Asian groups sensitive to ESG (Environmental-Social-Governance) criteria

Geopolitical evolution also encourages some Ukrainian groups or close economic partners (notably via trade agreements between Kiev and San José) to consider a strengthened presence in sectors not directly exposed to the conflict.

Political/Economic Measures Taken by the Costa Rican Government:

Summary list:

1. Acceleration of administrative procedures to favor FDI.
2. Targeted tax incentives in certain strategic sectors (green technology, sustainable tourism).
3. Active international promotion via the national brand “essential COSTA RICA” which highlights democratic stability, environmental excellence, and social innovation.
4. Negotiation of bilateral agreements with several European countries as well as with Ukraine to further broaden the spectrum of potential trading partners.

The government has recently intensified its economic cooperation with Kiev, notably considering a framework agreement aimed at revitalizing trade exchanges and also mutual investments – a symbolic step that could pave the way for more structured real estate interactions between these two regions.

Local Testimonials:

“We are observing a significant multiplication in the number of investors from traditionally absent markets such as certain German or Scandinavian funds,” notes a real estate agent based in San José. “Many are explicitly seeking an area protected from any future escalation in Europe.”

A Costa Rican developer adds: “Our European interlocutors are very attentive to the local regulatory framework—they want to avoid any legal risk after having experienced several successive crises at home.”

In this global context marked by rapid realignment of economic alliances, the Costa Rican real estate market benefits widely:

• From a strategic repositioning as a safe-haven destination,
• From an unprecedented influx of diversified capital,
• And from increased recognition among international institutional actors wishing to combine financial profitability and societal responsibility.

This now places Costa Rica among the main indirect beneficiaries—outside the immediate conflict zone—of the new geopolitical imbalance induced by the war in Ukraine.