Buying real estate in Colombia?

We've created a guide to help you avoid pitfalls, save time, and make the best long-term investment possible.

10 reasons why you should buy property in Colombia in 2025

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Authored by the expert who managed and guided the team behind the Colombia Property Pack

buying property foreigner Colombia

Everything you need to know before buying real estate is included in our Colombia Property Pack

Are you considering expanding your investment portfolio with international real estate? Curious about the potential returns and risks of buying property in Colombia? Wondering how the local market trends and economic factors could impact your decision?

We will lay down recent insights, providing a clear picture of the current property landscape in Colombia. Here, no guesswork, we rely only on solid data to guide your investment choices.

Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Colombia Property Pack

This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.

1) Colombia's government boosts foreign real estate profits with irresistible tax incentives

Colombia is rolling out the red carpet for foreign real estate investors with tempting tax incentives.

Imagine paying just 20% income tax if you invest in a Free Trade Zone, compared to the usual 34% elsewhere. This means more money stays in your pocket, boosting your investment's profitability. Plus, if you're eyeing hotel projects, there's a sweet deal: a fixed 9% income tax for the first decade in big cities, and this extends to 20 years in smaller towns.

Building costs can be a headache, but Colombia eases the pain with VAT exemptions on construction materials for certain projects. This perk slashes development costs, making your returns even juicier. And if you meet specific conditions, Resolution SDH 650 throws in a 1% discount on real estate value, trimming your initial expenses.

These incentives are not just on paper; they're drawing investors to hotspots like Cartagena. The city is buzzing with a record number of non-resident tourists in 2023, and experts predict even more international visitors in 2024. This surge in tourism is a testament to the effectiveness of Colombia's investor-friendly policies.

Colombia's strategy is clear: make it financially rewarding for foreign investors to dive into its real estate market. With these tax breaks, the government is not just inviting you to invest but ensuring you get the most out of your investment.

Sources: Golden Harbors, Invest in Colombia, The Latin Investor

2) The peace agreement has skyrocketed security transforming vast areas into hot spots for real estate investment

The peace agreement in Colombia has made the country much safer and more appealing for real estate investment.

In 2023, the number of violent clashes between security forces and armed groups like the ELN dropped dramatically from 67 events in 2022 to just 11. This change is thanks to the six-month bilateral ceasefires announced by President Petro in December 2022, which have significantly reduced violence.

With improved security, foreign investment in Colombia has surged. The government reported US$17,446 million in foreign investment in 2023, with a big chunk going into real estate. Investors from North America and Europe are particularly interested, drawn by Colombia's stable economic growth and low inflation.

Property values in cities like Medellín and Cartagena are on the rise, fueled by urban population growth and a booming demand for housing. The Colombian government is sweetening the deal with fiscal, tax, and migratory incentives to attract more investment projects.

Infrastructure development is also playing a key role. Both cities and rural areas are seeing improvements, making them more attractive to investors looking for opportunities beyond the usual hotspots.

Sources: ACLED, Expat Group, The Latin Investor

Everything you need to know is included in our Real Estate Pack for Colombia

3) Colombia's peso exchange rate slashes property costs for foreign investors making it a real estate goldmine

The Colombian peso's favorable exchange rate is making property investments more appealing for foreign buyers.

In 2023, the exchange rate hovered around 1 USD = 4,323.28 COP, meaning your dollars stretch further in Colombia. This depreciation of the peso against the dollar allows you to get more bang for your buck when buying property.

Take Bogotá, for instance. In its upper-middle-class neighborhoods, property prices range from COP 5 million to COP 8 million per square meter. In dollar terms, that's about USD 1,132 to USD 1,811, which is quite a bargain compared to other major Latin American cities.

Colombia's government is also rolling out the welcome mat for foreign investors. They've set up policies that let foreigners own property without any red tape, making it easier to dive into the market. This, along with the favorable exchange rates, is drawing more international interest.

Real estate agencies are buzzing with activity as more foreign buyers look to capitalize on these opportunities. The combination of affordable prices and a supportive legal framework is a win-win for investors.

So, if you're considering a property investment, Colombia's current economic climate and government incentives make it a compelling choice.

Sources: USD to COP Exchange Rate History for 2023, Real Estate Market in Colombia Review 2024, Colombia Residential Real Estate Market Analysis 2024

4) Colombia's urban boom is driving demand for homes in major cities

Colombia's urban population has surged, with 82.35% of people now living in cities by 2023.

Many Colombians are flocking to bustling cities like Bogotá, Medellín, and Cali, driven by the need for safety and better job opportunities due to the country's long-standing armed conflict. These cities are becoming vibrant hubs, attracting those seeking a fresh start.

The Colombian government is actively working on urban development, recognizing the urgent need for more housing in these growing cities. Their policies aim to tackle the housing shortage and enhance living conditions, making city life more appealing.

With a rising middle class, there's a noticeable shift towards properties that offer modern amenities and convenience. This demographic is eager to invest in homes that match their lifestyle aspirations, further boosting the demand for urban residences.

Colombia's urbanization trend is reshaping its real estate market, with major cities experiencing a significant increase in residential property demand. This shift is transforming urban landscapes and creating new opportunities for potential buyers.

Sources: Trading Economics, Urbanet, Statista

5) Colombia's tourism surge is unlocking lucrative short-term rental investment opportunities in hot spots

Colombia is experiencing a remarkable tourism boom in recent years.

In 2023, the country saw nearly 5.9 million international tourists, a 23.5% jump from the previous year. This trend is expected to continue into 2024, with a projected 24% increase in tourist arrivals in the first half of the year compared to 2023. This influx of visitors is not just numbers; it's a sign of Colombia's growing appeal as a travel destination.

The short-term rental market is riding this wave, with listings skyrocketing from 73,090 to 123,640 between January 2021 and September 2023. Occupancy rates hit 35% in early 2023, showing that travelers are increasingly opting for these accommodations. Colombia is now the third-highest earner in Latin America from short-term rentals, with a 19.6% revenue growth in 2023.

Government initiatives are a big part of this success story. The Colombian government has invested $25 million USD in tourism projects, including infrastructure like the Bogotá Metro Line 2, which boosts connectivity in popular areas. These efforts, along with the rise of low-cost airlines and international events, make Colombia more accessible and appealing to tourists.

For those considering property investment, this tourism surge presents a golden opportunity. Popular areas are seeing a boom in short-term rental demand, driven by the influx of international visitors. The combination of government support and increasing tourist numbers makes Colombia a promising market for short-term rental investments.

Sources: Medellin Advisors, The Latin Investor, Finance Colombia, Travel Pulse

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6) Colombia's rich culture and lively cities are a magnet for global buyers seeking one-of-a-kind properties

Colombia's rich culture and lively cities are drawing in international buyers eager for unique properties.

In 2023, Cartagena saw a record-breaking influx of nearly 5.9 million non-resident tourists, highlighting a strong bounce back from the pandemic. This upward trend is set to continue, with a 24% rise in international tourists expected in the first half of 2024. The city's charm and historical significance make it a hot spot for those looking to invest in a vibrant locale.

The Colombian real estate market is booming, with projections reaching USD 2.12 trillion in 2024. This growth is largely fueled by foreign investors who are drawn to the country's political and economic stability. Cartagena stands out with a surge in foreign investment, thanks to its thriving tourism and ongoing infrastructure development, which are driving up property values.

Expat communities, particularly from the US and Canada, are expanding in Colombian cities like Cartagena. These expats see local properties as solid investment opportunities. In culturally rich areas, such as Cartagena's historic center, property values have soared, with some experiencing price hikes of up to 300% to 600% over a few years.

Cartagena's appeal lies not just in its historical allure but also in its modern amenities and vibrant lifestyle. The city's unique blend of old-world charm and contemporary living makes it a prime location for those seeking a distinctive property investment.

For international buyers, Colombia offers a mix of cultural richness and economic promise, making it an attractive destination for property investment. The country's strong cultural heritage and vibrant cities continue to attract those looking for unique properties.

Sources: The Latin Investor, The Latin Investor

7) Colombia's prime location skyrockets its status as a global business hub driving a real estate boom

Colombia's strategic location has made it a hub for international business, significantly boosting real estate demand.

Thanks to its position as a gateway between North and South America, Colombia is a prime spot for international trade and business activities. Cities like Bogotá, Medellín, and Cartagena are bustling commercial hubs, offering easy access to various markets. This makes Colombia particularly appealing to international investors looking for a foothold in the region.

The U.S.-Colombia Trade Promotion Agreement has been a game-changer, eliminating tariffs on many U.S. exports and promoting trade and investment between the two countries. This has led to a surge in multinational companies eyeing Colombia as a strategic location for their regional offices.

Colombia isn't just resting on its laurels; it's investing heavily in infrastructure projects like ports and highways. These improvements have boosted connectivity and made business operations smoother. Add to that the government incentives for foreign investors in real estate, and you've got a recipe for a booming property market.

In cities like Bogotá and Medellín, property values are on the rise, reflecting the growing demand. This trend is a clear indicator of Colombia's increasing allure for those looking to diversify their investments. The country's strategic location and business-friendly environment are key drivers of this real estate surge.

Sources: Trade.gov, USTR, Golden Harbors

8) Colombia's booming infrastructure with new roads and public transport is skyrocketing property values

Colombia's infrastructure boom is boosting property values across the country.

With the government pouring resources into new roads and public transport, thousands of miles of roads are being built to modernize the nation. This isn't just about roads; it's a comprehensive upgrade that includes railways and airports, making Colombia more accessible and attractive for property buyers.

By 2023, many of these projects were close to completion, with some already in use. This has cut travel times significantly, making commuting and transporting goods much easier. In Medellín, the metro and tunnel projects have enhanced connectivity, turning the city into a hotspot for potential buyers. The cable car projects have also revitalized hillside neighborhoods, boosting their charm and property values.

These infrastructure improvements have led to a rise in property prices, especially in areas with better transport links. In Medellín's eastern suburbs, for instance, property values have surged thanks to the new metro and tunnel projects. Cartagena's beachfront properties are also seeing double-digit annual price growth, fueled by foreign investment and tourism.

Surveys indicate that buyers are increasingly drawn to homes near new transport facilities, highlighting the growing demand for well-connected properties. This trend is reshaping the real estate landscape, with more people seeking properties that offer easy access to modern infrastructure.

Sources: Financial Times, The Latin Investor

Everything you need to know is included in our Property Pack for Colombia

9) Colombia's booming middle class is skyrocketing housing demand and sending property values soaring

Colombia's middle class is growing rapidly, thanks to economic stability and development.

As more Colombians find themselves in this income bracket, they're eager to upgrade their living situations, often by buying homes. This surge in home buying is a direct result of the expanding middle class, which is a key driver of housing demand.

Urbanization is another major factor. Cities like Bogotá and Medellín have seen a massive influx of people, with urban populations jumping from 38.3% in 1950 to 75.5% in 2018. This urban shift has concentrated the middle class in city areas, further boosting the need for housing there.

In these bustling cities, the demand for homes is outstripping supply. Property prices are climbing because there aren't enough homes to satisfy the needs of the growing middle class. This shortage is a significant factor in the rising property values.

Moreover, getting a mortgage has become easier, which means more people can afford to buy homes. This increased access to mortgage lending is fueling the housing market, adding to the demand.

Sources: BBVA Research, Urbanet, The Latin Investor

10) Colombia's stunning climate and geography are drawing retirees and expats

Colombia's diverse climate and geography are drawing in retirees and expatriates, boosting the demand for homes.

Imagine living in a place where you can enjoy both the mountains and the beach without breaking the bank. Colombia is recognized as one of the top affordable places to live, offering stunning landscapes and rich culture. This affordability, paired with friendly visa programs, makes it easy for retirees to settle comfortably on a modest budget.

In cities like Bogotá, Medellín, and Cartagena, the real estate market is booming. This growth is driven by urbanization and foreign investment, leading to a high demand for housing. International investors are flocking to these areas, pushing property values up and making them even more appealing to expatriates.

Colombia consistently ranks as a top spot for retirees, thanks to its affordable yet comfortable lifestyle. Basic living costs, including housing, transportation, and healthcare, are much lower than in places like the United States. This cost-effectiveness, along with the country's varied geography offering everything from beachfront homes to city apartments, attracts a diverse group of retirees and expatriates.

For those looking to retire abroad, Colombia offers a unique blend of affordability and beauty. The country's diverse landscapes and welcoming communities make it a top choice for those seeking a new adventure. Whether you're drawn to the vibrant city life or the tranquil countryside, Colombia has something for everyone.

With its growing real estate market and attractive living conditions, Colombia is becoming a hotspot for international retirees. The combination of low living costs and stunning natural beauty makes it an ideal destination for those looking to enjoy their golden years in style.

Sources: Golden Harbors, SmartAsset, The Latin Investor, International Living