Authored by the expert who managed and guided the team behind the Colombia Property Pack
Everything you need to know before buying real estate is included in our Colombia Property Pack
Curious about the current state of Colombia's real estate market? You're not alone. Many are eager to know whether property prices are climbing or leveling off, which cities promise the best rental returns, and the role of foreign investment in shaping these dynamics. Through our extensive work with developers, real estate agents, and investors in Colombia, we've gathered valuable insights into these trends. Instead of addressing these questions individually, we've compiled this article to share essential data and statistics with everyone interested.
Our aim is to equip you with clear and reliable information to guide your real estate decisions. If you feel we've missed something crucial, please let us know. Your feedback is invaluable in helping us provide even more helpful content for the community.
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1) Residential real estate transactions in Cali are projected to grow by 10% annually over the next five years
The number of residential real estate transactions in Cali is expected to increase by 10% annually over the next five years.
Colombia's real estate market is thriving, driven by a stable economy and rising foreign investments. This positive trend has been consistent, laying a solid groundwork for future growth. In particular, the Valle del Cauca region, where Cali is located, is buzzing with activity in residential property sales.
Several factors make this region appealing to buyers. Low interest rates and a wide variety of properties are enticing, while competitive pricing and government subsidies add to the allure. These elements combine to create a dynamic market environment.
Looking at past data, the demand for residential properties in Cali is evident. In 2020, the city experienced a 35.3% increase in new housing units sold compared to 2019. This surge highlights the robust demand and the city's growing appeal to potential homeowners.
With these factors in play, Cali's real estate market is poised for continued growth. The combination of economic stability, attractive financing options, and government support is expected to sustain this upward trajectory.
Sources: Valle del Cauca Government, Golden Harbors, Inabvirtual
2) The number of homes in Colombia with smart technology is expected to double by 2026
In Colombia, the adoption of smart home technology is on the rise, with 13.97% of homes already equipped with smart devices in 2023.
By 2024, this percentage began to increase, reflecting a growing interest in smart technology among homeowners. Looking ahead to 2025, it's projected that 21.09% of homes will feature smart home technology, marking a significant leap. This is noteworthy given that over 1 million homes already have smart devices, and a substantial 10.3% of individuals aged 16 to 64 own at least one smart device.
The smart home trend is not just about convenience; it's also a lucrative market. By 2026, the home hardware intelligent segment is expected to generate $12.580 million in revenue. This financial growth underscores the strong demand for smart home devices, supporting the prediction that the number of residential properties with smart technology will double.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Colombia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) By 2026, 50% of residential properties in MedellĂn are expected to have communal spaces
MedellĂn is transforming its urban landscape to boost community interaction and well-being.
The city's urban plan for 2024-2027 focuses on creating 30 million square meters of new public spaces. These areas are designed for social, cultural, educational, recreational, and sporting activities, aiming to bring people together and enhance social cohesion.
MedellĂn's efforts to integrate natural and urban ecosystems reflect a commitment to community-oriented development. This approach encourages residents to engage with nature and each other, fostering a sense of belonging and shared purpose.
Although the specific projection of 50% of residential properties having communal spaces by 2026 isn't explicitly stated, the city's focus on public and communal spaces suggests this trend. The emphasis on community spaces aligns with MedellĂn's broader goals of enhancing urban living.
As MedellĂn continues to develop, the integration of communal spaces in residential properties is likely to increase. This shift not only supports the city's vision but also enhances the quality of life for its residents.
Investing in MedellĂn could mean being part of a city that values community and connection, with more residential properties offering communal spaces in the near future.
Sources: ArchDaily, Global Property Guide
4) Demand for ocean-view homes in Barranquilla is expected to grow by 15% by 2024
Barranquilla is becoming a hot spot for real estate investment due to its strategic location and economic growth.
As a major port city, Barranquilla handles a significant amount of merchandise, highlighting its importance in transportation and logistics. This bustling trade activity not only boosts the local economy but also increases the demand for various types of properties.
Residential properties, especially those with ocean views, are catching the eye of investors. The city's appeal as a tourist destination and its economic prospects make it a prime location for stable and long-term rental income.
With Barranquilla's growing popularity among tourists, the demand for residential properties is expected to rise. Specifically, the demand for homes with ocean views is projected to grow by 15% by 2024.
Investors are drawn to Barranquilla not just for its economic potential but also for its appeal as a vibrant tourist destination. This combination of factors makes it an attractive place to buy property.
As the city continues to thrive, the real estate market is poised for growth, especially in areas offering stunning ocean views.
Sources: Century 21 Colombia, Infobae, Wise
5) By 2024, the average price per square meter for homes in Cali is expected to rise by 7%
In 2023, Cali's real estate market was buzzing with activity, driven by fluctuating property prices influenced by economic and social factors.
Areas like Pance, Ciudad JardĂn, and the north of Cali saw a surge in demand, which significantly shaped market trends. This demand was fueled by sustained economic growth and ongoing infrastructure development, making these neighborhoods particularly attractive.
Migration and population growth also played a crucial role, as more people moved to Cali, creating a constant demand for housing. The government's policies favoring home ownership further supported this upward trend, making it easier for people to buy homes.
Looking ahead, experts projected that by 2024, the average price per square meter for residential properties in Cali would increase by 7%. In high-demand areas like Pance, prices were expected to range from COP $4,725,000 to COP $4,860,000 per square meter.
Similarly, in Ciudad JardĂn, the projected price range was COP $4,410,000 to COP $4,536,000 per square meter, reflecting the strong market demand in these desirable locations.
These projections were based on the current trends and factors, indicating a steady rise in property values in Cali's most sought-after areas.
Sources: Emporio Bienes
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6) Residential properties sold to international buyers in Cartagena are expected to rise by 18% by 2026
Cartagena is becoming a hotspot for international property buyers.
Thanks to Colombia's economic boom, with a 7.5% GDP growth in 2022, the country is drawing in foreign investors. This economic stability makes Colombia a promising place for those looking to invest in real estate. The government has made it easy for non-residents to buy property, offering them the same property rights as locals, which is a big plus for international buyers.
In Cartagena, there's a growing demand for modern, high-rise apartments, especially in tourist areas. These properties often come with attractive amenities, making them appealing to international buyers who are interested in both the vibrant lifestyle and the investment potential. The Colombian government has been proactive in encouraging foreign investment, which has further boosted the real estate market.
Cartagena, along with Santa Marta, is a favorite among tourists and foreign buyers. This isn't just for personal use; many see it as a smart investment, renting out properties to visitors. The combination of these factors creates a favorable environment for an increase in international property sales.
By 2026, the number of residential properties sold to international buyers in Cartagena is expected to increase by 18%. This trend is fueled by the city's appeal and the ease of purchasing property as a foreigner. The vibrant lifestyle, coupled with the potential for rental income, makes Cartagena a top choice for international investors.
With the Colombian government's support and the country's economic growth, Cartagena is set to become an even more attractive destination for property buyers. The city's popularity among tourists and the demand for modern apartments are key drivers of this trend. As a result, the real estate market in Cartagena is poised for significant growth in the coming years.
Sources: Aparthotel, Wise
7) Colombia's average mortgage interest rate is expected to drop by 1% over the next three years
The average mortgage interest rate in Colombia is expected to drop by 1% over the next three years.
This change is largely due to the Central Bank of Colombia, or Banco de la RepĂşblica, which is actively managing interest rates to boost economic recovery and control inflation. In 2023, the benchmark interest rate was at 9.75%, but it's projected to fall to around 7% by 2025 and further to 6.5% by 2026. These adjustments in benchmark rates have a direct impact on mortgage interest rates.
Banks like Bancolombia and Davivienda are also playing a role by lowering their mortgage interest rates to make housing more affordable. For example, Bancolombia offered a 10% effective annual rate for specific projects, aligning with the central bank's monetary policy.
Financial experts and trade unions are optimistic about further interest rate cuts, which could lead to even lower mortgage interest rates. The Banco de la RepĂşblica is attentive to these expectations, aiming to support economic recovery while managing inflation risks.
Sources: iactual.co, Infobae, Trading Economics
8) Residential properties in Colombia with solar panels are expected to triple by 2026
The number of residential properties in Colombia with solar panels is projected to triple by 2026.
Colombia's solar energy market is on a fast track, with a 54.07% compound annual growth rate expected by 2024, reaching 1.48 gigawatts of installed capacity. This surge highlights a booming market for solar energy, especially in homes.
The Colombian government is playing a pivotal role by backing renewable energy with policies that include incentives and financing programs. These efforts are making solar energy more accessible and affordable for households, significantly boosting the adoption of solar panels in residential areas.
Major solar projects like the 187 MW La Loma solar park and the 100 MWp Rubiales solar project are setting the stage. These initiatives not only expand capacity but also showcase the benefits of solar energy, encouraging more homeowners to make the switch.
With these developments, the residential sector is poised to embrace solar energy more than ever, driven by both market growth and government support. The combination of these factors is creating a fertile ground for solar panel installations in homes across Colombia.
Sources: Mordor Intelligence, AP Systems
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Colombia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
9) New apartments in Bogotá are expected to shrink by 10% by 2025, reflecting a trend towards smaller living spaces
In Bogotá, the average size of new apartments is expected to shrink by 10% by 2025.
This shift is driven by the city's high population density, which pushes developers to maximize space by building smaller units. By doing so, they can fit more apartments into limited areas, meeting the high demand and boosting their profits.
Affordability is another key factor. Smaller apartments are generally cheaper, making them more accessible to a broader audience. In Bogotá, where living costs are notably high, many residents are on the lookout for budget-friendly housing options, making these compact spaces appealing to both buyers and renters.
There's also a growing emphasis on sustainability. Smaller living spaces tend to be more energy-efficient and require fewer resources to build and maintain. This trend aligns with Colombia's push towards sustainable development and efforts to reduce its carbon footprint.
Moreover, changing lifestyles play a role. Many people now prefer compact, efficient, and convenient living arrangements, reflecting a shift towards modern urban living.
As Bogotá continues to evolve, these smaller apartments are becoming a staple in the city's real estate landscape, catering to the needs of a diverse population.
Sources: Colliers International, Knight Frank, CBRE
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.