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Real estate market in Colombia

Hello

I am planning to move to Colombia and maybe later buy a flat/house/land there.

I know that the Colombian economy is doing good and the prices of real estate have been going up a lot in the last 5 or 10 years or something and that Colombia has been regarded as a business opportunity for many.

Myself i am not interested in making business but i am afraid to buy my house between now and 2020 at a high price and that later the prices will come crashing down because of a market bubble.

so i am asking the question, is it a good time to buy real estate in Colombia?

thank you

I don't think that the Colombian economy is going great.  The government has been lowering interest rates on mortgage rates to try and stimulate the enconomy.  Also the banks have been lowering interest rates on CDT's.

I have observed several newer apartments and homes on the market that have not yet sold after six months.  I would recommend renting something for now.  If the peso starts declining then it may be a good opportunity at a later date.

thanks for the heads up

i was referring to the 4%, 6% and sometimes 8% GDP Annual Growth Rate in the last 10 years that might have influenced the prices of real estate to go up ( i am really not an expert at all, just trying to grasp basic trends, i think these rates meant the economy was booming but know it s slowing down it seems).
https://tradingeconomics.com/colombia/gdp-growth-annual

do you think the price of houses have gone significantly up in the last ten years?

https://d3fy651gv2fhd3.cloudfront.net/charts/colombia-gdp-growth-annual.png?s=cocipiby&v=201707031806v&d1=20070101&d2=20171231

i am starting to think it was a good idea to buy 5 or 10 years ago, but now it s getting risky or stupid. as you said, some houses are not being sold after six months which is really bad i guess and the prices of houses might go down significantly in the coming years then if this  is a trend.

the market should not be the main reason to buy a house in a country or another, but rather where you want to live and enjoy your life... but still, that would stupid to lose your money because of the market. sad :-(

Hi unleashed,
Speaking as someone who just bought here, I think there are a lot of variables to consider. The currency you are using for one. The dollar is strong right now so I made the decision to buy based on capital preservation. I love living here so I feel that I cannot lose. I don't think that there is as much of a property bubble here as in other parts of the world due to strict banking rules and money laundering regulations. Having said that, most of the middle to upper class Colombians I've met, buy property with their savings as an investment, much as Americans did in the 60's, as a means to hedge against inflation or currency depreciation. Also the Colombian economy seems to be closely tied to the price of oil. Gasoline prices here seem to stay the same no matter what a barrel of oil costs, so unlike in the US, low oil prices do not add any stimulus to the economy and fewer state funds put a burden on the government, inhibiting state investment. I am in Medellin. Landstryker

@LandStryker thanks for the feedback

"I don't think that there is as much of a property bubble here as in other parts of the world"
> ok reassuring feedback... will get more feedback from more people before making my mind.

"I love living here so I feel that I cannot lose"
> i am going to Colombia in three weeks for a vacation and will soon find out myself if this country can be my new home :-)

Landstryker :

The currency you are using for one. The dollar is strong right now so I made the decision to buy based on capital preservation.

Interesting point.  Made me look it up!

The Colombia Peso (COP) has lost about 43% of its value relative to the USD over the past five years.  Stated differently, 1 USD bought 1,791 COP five years ago.  Now, 1 USD buys 3,050 COP.  (Got as high as 3,383 in early 2016!)  Not bad if you're bringing in USD and, I would assume to a lesser extent, Canadian Dollars.

The negative (outweighed by the foreign currency exchange) is that Colombia has wild inflation at times - seems to have run between 2% and 9% over the past five years, maybe averaging an annual 4.5% inflation rate, more or less.

Hi SawMan,
I am no economist but I think averaging 4-5% inflation in a developing country would indicate growth more than a serious problem as long as it doesn't spiral up into double digits. Wages don't seem rise here as quickly so eventually demand should drop and inflation self correct. My guess is that there is a bit of a dual system here where luxury goods take up a large portion of that inflation rate. Haven't been here long enough to know for sure though. Landstryker

No property bubble or even close in most parts of Colombia right now. The issue with properties not selling quickly has got a great deal to do with sellers looking to sell themselves, instead of through professional and experienced agencies, plus pricing properties at random, ridiculous and silly numbers. It has nothing to do, again for the most part, with supply demand factors. Also, certain Colombia markets, Medellín, Bogotá and to a lesser extent Cartagena, have a very concentrated "desirable geographic zone" that is driving up prices to goofy levels, in some submarkets. Perfectly great areas go undersold and these micro areas see too much demand, not enough supply. But, again, it is micro submarkets, not the broader market. This trend is especially true where a heavy influx of expat funds have accumulated, since they tend to have a very myopic view of where is a desirable location to live. All depends on what you are looking for and how flexible you are, but if you are purchasing with foreign currency, exchanged for Colombian Pesos, odds are good you can get yourself a good deal today, if you know where and how to shop.

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