Colombia´s property market has experienced strong house price growth over the last thirteen years. From 2011 to 2018, house prices in Cali have risen by 85.35%, followed by Medellin (84.5%) and Bogota (79.68%).
House and apartment prices increased by 4.7% during the year to Q3 2019, according to the Banco de la Republica Colombia (Banrep) index, which covers second-hand houses and apartments. The Banrep house price index includes nine cities (Bogotá, the capital, with a population of 7.2 million), Medellin (pop: 2.5 million), and Cali (pop: 2.4 million), plus Barranquilla, Bucaramanga, Cucuta, Manizales, Neiva and Villavicencio.
Looking for an investment?
If what you want is a high income producing investment then you should be looking at a very short list of high-quality, very well located buildings with modern amenities that ideally allow for (legal) short-term rentals, probably in Poblado and potentially Laureles where you’ll find 90 percent of the demand from foreign business and leisure travellers.
Combined with a lack of buildable land and an ever-strict city planning department, this is why new constructions in Poblado are approaching $8,000,000+ pesos/square meter in 2021 (almost $2300 USD/sq meter or apprx $220 sq/ft). And other buildings in Medellín at the moment are $10,000,000 COP/m2 and beyond.
Higher prices in newer buildings, however, come with higher rental prices as well, so the math often works out in your favor. Not to mention liquidity; it is much easier to sell in newer, professionally managed buildings.
If the new building is designed with short-term rentals then you’re definitely buying into a secure and steady income producing asset. Even during the height of the pandemic, nobody lost money in any month during 2020.
Growing tourism for your Real Estate Investment
Tourism is a growing sector of Colombia’s economy. Travel and tourism´s total contribution climbed from 4.5% of GDP in 1995 to 5.6% of GDP in 2018, according to the World Travel and Tourism Council (WTTC). In 2018, tourist arrivals increased by 9.4% y-o-y to around 3.10 million visitors.
The Colombian Association of Travel and Tourism Agencies (Anato) revealed that between December 1 and 21, 2020 that tourism recovery continues in Colombia after COVID, especially due to the reopening and arrival of new air routes. Civil Aeronautics reported to Anato that the movement of national passengers has been reactivated by 53 percent and on international flights by 35 percent, which is equivalent to an increase of 11 percent above the same period last month. So, that was 11 percent growth month-to-month.