Authored by the expert who managed and guided the team behind the Colombia Property Pack
Yes, the analysis of Medellín's property market is included in our pack
Are you considering investing in Medellín's property market and wondering what the future holds? Curious about the emerging trends that could impact your buying decision? Want to know which areas are set to boom and which might cool off?
We will lay down recent insights. Here, no guesswork, we rely only on solid data.
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) Medellín residential property prices will stabilize after rapid growth
Medellín's residential property prices have been on a rapid rise, but this is expected to level out soon.
One reason for this change is the slowing growth rate of property prices. While prices are still climbing, the pace is expected to ease to about 3% to 7% by 2025. This means that while the market remains active, the frantic pace of price hikes is cooling off.
Another factor is the increased availability of homes on the market. With more properties to choose from, buyers have more options, which naturally helps to stabilize prices. In popular areas like El Poblado and Laureles, real estate agencies report a dip in buyer demand, indicating that while interest is still there, it's not as fierce as it once was.
Economic conditions are also influencing this trend. Colombia's GDP growth is expected to plateau, which could mean less support for skyrocketing property prices. Additionally, government initiatives like subsidies and favorable mortgage rates for first-time buyers are designed to cool the market, contributing to the stabilization.
For those considering buying property in Medellín, this could be a good time to explore options. The market is becoming more balanced, offering potential buyers a chance to find a home without the pressure of rapidly increasing prices.
Sources: The Latin Investor, The Latin Investor, Nearshore Americas
2) Rental yields in central neighborhoods will rise with growing short-term rental demand
Rental yields in central neighborhoods are on the rise as the demand for short-term rentals in Medellín grows.
In 2023, Medellín welcomed a surge of international visitors, with around 659,097 international tourists and a total of 1.2 million tourists, surpassing pre-pandemic numbers. This influx has naturally increased the need for short-term accommodations, like those found on Airbnb.
With more tourists arriving, occupancy rates for short-term rentals in popular areas have soared, hitting impressive levels between 70% and 85% annually. This high demand means short-term rentals often bring in higher returns than traditional long-term options. For example, a four-bedroom penthouse in El Poblado can earn between $3,000 and $4,000 monthly, offering a gross yield of over 13%.
Medellín's ongoing infrastructure projects, like expanding public transportation, are making the city even more appealing to tourists. These improvements make central neighborhoods more accessible, supporting the growth of the short-term rental market. Plus, the rise of digital nomads and expatriates, attracted by Medellín's cost of living and quality of life, is further driving demand for short-term stays, boosting rental yields.
Sources: The Latin Investor, Medellín Advisors, International Living
Everything you need to know is included in our Real Estate Pack for Medellín
3) Rents in popular neighborhoods will rise due to growing demand from digital nomads and remote workers
Medellín is now a prime spot for digital nomads and remote workers, causing rental prices to rise in its popular neighborhoods.
In 2023, areas like Laureles and El Poblado saw rental prices jump by 81% and 10.33%, respectively. This surge is fueled by the influx of digital nomads and remote workers who are drawn to the city. Medellín's charm lies in its vibrant lifestyle, with leafy suburbs and a buzzing cafe culture, making it a magnet for those working remotely.
Every month, about 8,300 digital nomads arrive in Medellín, thanks in part to the digital nomad visa introduced in 2022. This visa aimed to attract 45,000 digital nomads over 18 months, and it's working. The demand for housing in popular neighborhoods is climbing, pushing rental prices higher.
Medellín's reputation as a top remote work destination is backed by surveys and rankings. The city is consistently praised for its appealing lifestyle and relatively low cost of living. This reputation continues to draw more digital nomads, further increasing the demand for rentals in sought-after areas.
As more remote professionals flock to Medellín, the city's rental market is feeling the pressure. The demand from digital nomads and remote workers is reshaping the housing landscape, especially in neighborhoods like Laureles and El Poblado. This trend is expected to continue as Medellín remains a favorite among those seeking a dynamic work-life balance.
Sources: Marketplace, Nearshore Americas, Scholars UNH
4) Foreign investors target short-term rentals to profit from tourism growth
Medellín is buzzing with tourists, welcoming around 659,097 international visitors in 2023.
This surge in tourism has led to more international flights, making it easier for travelers to reach the city. With this increased accessibility, short-term rentals are booming as tourists look for flexible places to stay.
Airbnb is thriving in Medellín, bringing in over US$62 million each year. From 2020 to 2021, the platform saw a whopping 119% jump in revenue, showing just how popular short-term rentals have become. The local government sees Airbnb as a smart way to tackle accommodation issues, which is boosting this trend even more.
For foreign investors, Medellín's short-term rentals are a goldmine, offering annual returns of 7-10%. This profitability makes these properties a hot ticket, especially when considering the economic hit the city could take if Airbnb activities were restricted.
Sources: Medellín Advisors, Medellín Advisors, Travel Noire
5) Stricter zoning laws will control what developments can happen in specific neighborhoods
Medellín's stricter zoning laws are reshaping the city's neighborhoods.
In 2023, the city rolled out new rules to encourage sustainable and inclusive growth. This means more green spaces and mixed-use developments are getting the green light, while high-density residential projects are taking a backseat. If you're eyeing El Poblado, known for its upscale vibe, expect fewer high-rises. The focus is shifting to mid-rise buildings that blend living and commercial spaces, thanks to concerns about urban density and environmental impact.
In fact, the Medellín City Planning Department noted that over 30% of development permits were denied in 2023 due to zoning law violations. This shows just how serious the city is about these new regulations. The Medellín Chamber of Commerce reported in 2024 that projects getting the nod are those that tick the sustainability boxes, like green buildings and those with public transport links.
On the flip side, high-density projects without enough green space are often turned down. This shift is also visible in the real estate market, where there's a growing appetite for properties with green roofs and community gardens. It's all about aligning with the city's push for environmental sustainability.
So, if you're considering buying property in Medellín, keep an eye on these trends. The city's zoning laws are not just about limiting what can be built but are steering the market towards more eco-friendly and community-focused developments. This could mean a more vibrant and sustainable living environment for future residents.
Sources: El Colombiano, El Tiempo, Chamber of Commerce of Medellín
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6) Foreign buyers will increasingly seek eco-friendly sustainable properties in Medellín
Foreign buyers are showing a growing interest in eco-friendly and sustainable properties in Medellín.
Medellín is seeing a boom in eco-friendly property developments, with over 20% of new buildings in Colombia certified under the IFC's EDGE program by 2023. This reflects a strong commitment to sustainable construction, making the city a hotspot for environmentally conscious investors.
The demand for sustainable building materials in Colombia is on the rise, expected to grow by more than USD 1 billion from 2024 to 2029. This surge is fueled by government initiatives promoting green building practices, aligning with foreign buyers' preferences for energy-efficient homes that promise lower utility bills.
Real estate listings in Medellín are now emphasizing sustainable features like energy-efficient appliances and eco-friendly materials. This shift is not just a marketing tactic; it's backed by media coverage highlighting the benefits of sustainable living, which is reshaping buyer expectations.
Government incentives are also playing a crucial role, with laws mandating minimum energy efficiency criteria for new buildings. These policies make sustainable properties even more attractive to buyers who prioritize environmental responsibility.
As Medellín continues to evolve, the city's commitment to sustainability is becoming a key selling point, drawing in foreign buyers who value eco-friendly living. The trend is clear: eco-conscious investments are on the rise, and Medellín is at the forefront.
Sources: Medellin Advisors, Bona Fide Research, The Latin Investor
7) New tax incentives for green buildings will boost sustainable residential property development
New tax incentives for green buildings are making Medellín a hotspot for sustainable residential properties.
In 2023, over 20% of new buildings in Colombia were certified under the IFC's EDGE program, with Medellín leading the charge. This trend is expected to continue, with projections indicating that over 20% of new buildings will be EDGE certified by 2025. The Colombian government's National Sustainable Construction Policy is a big driver here, offering tax breaks that make green building more attractive.
This policy is part of a larger goal to cut greenhouse gas emissions by 51% by 2030 and reach carbon neutrality by 2050. Thanks to these incentives, private sector investment in EDGE certified floor space has topped $5.9 billion. This shows a significant rise in investment in sustainable construction technologies, making it a smart move for developers.
Developers are increasingly drawn to homes that offer lower utility bills and eco-friendly designs, driven by consumer demand for sustainable properties. This interest is reflected in the growing number of developers seeking EDGE certification for their projects. In Medellín, buildings with LEED certification have shown significant energy and water savings, with a study case achieving 30% savings in energy and 35% savings in water consumption.
These savings are not just good for the planet; they also make properties more appealing to buyers looking to cut costs. The combination of tax incentives and consumer demand is creating a perfect storm for sustainable development in Medellín.
Sources: EDGE Buildings, The Latin Investor, SBT Durabi
8) Property tax changes will directly affect investment strategies and profitability
In Medellín, new property tax regulations are shaking up the real estate market.
The introduction of the "Impuesto de Timbre" in 2023 means that properties valued over COP 941.3 million now face higher tax rates. This progressive tax structure is a game-changer for investors, especially those eyeing high-value properties. For example, if you're considering a property worth COP 1.2 billion, you'll need to factor in a 1.5% tax, which could make or break your decision to buy.
Investors are now forced to rethink their strategies. With these new taxes, calculating potential returns has become more complex. The added costs can significantly impact profitability, making it essential to adjust investment plans accordingly. This is particularly true for those targeting the luxury market, where every percentage point counts.
Medellín's tax structure is unique compared to other Colombian cities, requiring investors to be more strategic. The unpredictability of these costs can make managing expenses a real challenge. As a result, investors need to be cautious and plan meticulously to ensure their investments remain profitable.
Real estate surveys in Medellín reveal that investors are increasingly concerned about the rising costs of property ownership. This has led to a shift in strategy, with more emphasis on understanding tax implications before making any investment decisions. The goal is to maintain profitability despite the heavier tax burden.
In this evolving landscape, thorough analysis of tax implications is now a critical part of the investment process. Investors are adapting by scrutinizing every detail to ensure their strategies align with the new tax realities.
Sources: Medellin Advisors, Golden Harbors, The Latin Investor
Everything you need to know is included in our Property Pack for Medellín
9) Demand for co-living spaces will surge as people seek community-focused living
In bustling cities like Medellín, co-living spaces are becoming increasingly popular.
These spaces are not just a trend; they're a booming market, valued at $13.3 billion in 2022 and expected to skyrocket to $63.8 billion by 2028. Medellín is a hotspot for this growth, with new developments catering to digital nomads and remote workers. These co-living spaces offer furnished rooms, individual leases, and all-inclusive pricing, making them a smart choice over traditional housing.
The introduction of the Digital Nomad Visa in October 2022 has been a game-changer, attracting remote professionals to Colombia. This visa aims to bring in around 45,000 digital nomads in just 18 months, boosting the need for co-living spaces. With remote work on the rise, people are looking for flexible, short-term housing that offers both community and affordability.
Many millennials and Gen Z individuals are shifting their priorities, valuing experiences and social connections over conventional housing. Platforms like Coliving.com make it easy to find roommates who match your lifestyle, ensuring a sense of community. Social media is buzzing with hashtags that highlight the perks of communal living, further driving this preference.
In Medellín, co-living spaces are not just about a place to stay; they're about creating a lifestyle. These spaces foster a sense of belonging and offer a unique blend of privacy and community. As more people seek out these community-oriented living arrangements, the demand for co-living spaces is set to rise.
For those considering a move to Medellín, co-living offers a vibrant, connected way of life. It's an opportunity to be part of a growing community that values flexibility and shared experiences.
Sources: Coliving.com, Tolj Commercial, Coliving.com for Young Professionals
10) Blockchain will streamline property transactions making them secure and efficient
Blockchain technology is transforming property transactions by making them more secure and efficient.
Back in 2023 and 2024, Colombia took a bold step with its National Land Registry Pilot Project, using blockchain to record land titles. This move ensured transparency and security, slashing processing times and cutting down on corruption. The "Registro de Propiedad" platform, developed by the Colombian National Registry, is a shining example of how blockchain can enhance property transactions. By recording and verifying transactions on a blockchain, the platform reduces fraud risks and boosts transparency.
This initiative was backed by Colombia’s Digital Government Office and the Ministry of Information and Communication Technologies, showing the government's commitment to innovation. Blockchain's knack for cutting out middlemen and automating tasks has led to significant cost savings. Reports from Deloitte suggested that blockchain could trim real estate transaction costs by up to 30%.
The International Blockchain Real Estate Association also highlighted that blockchain could slash real estate fraud by as much as 50%, potentially saving up to $160 billion annually. Imagine the peace of mind knowing your property deal is secure and efficient, thanks to blockchain. This technology is not just a trend; it's a game-changer in the real estate world.
Sources: Coin Rivet, Savvycom Software, Alcor BPO
11) Improved air quality will make certain neighborhoods more desirable for health-conscious buyers
Efforts to improve air quality in Medellín have made certain neighborhoods more appealing to health-conscious buyers.
In recent years, Medellín has seen a remarkable transformation in its air quality, with the Air Quality Index (AQI) now at a "Good" rating of 43. This cleaner air is a major attraction for those who prioritize their health. The city has invested heavily in green infrastructure and public transportation, such as the Metro and Metrocable systems, which not only reduce pollution but also make the city more accessible. These improvements are particularly appealing to buyers who value sustainable living and easy access to amenities.
Neighborhoods along the new metro and cable-car lines are becoming increasingly desirable, as real estate market reports indicate that property values tend to rise in areas with better air quality and improved transit options. This trend is evident in Medellín, where the combination of cleaner air and enhanced public transport is drawing more interest from potential buyers.
Health studies have shown a strong link between good air quality and better respiratory and cardiovascular health, aligning with global health standards. This makes Medellín's neighborhoods with improved air quality even more attractive to those who are health-conscious. The city's efforts in this area are not just about reducing pollution; they are about creating a healthier living environment for everyone.
For those considering buying property in Medellín, these improvements in air quality and public transport are significant factors to consider. The city's commitment to sustainability and health is making it a more appealing place to live. As these efforts continue, we can expect certain neighborhoods to become even more desirable.
Sources: Medellin Air Quality Index (AQI), Medellín’s Metro System, Colombia Real Estate Trends
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12) San Javier will become more attractive with better public transportation links
The San Javier area is becoming a hot spot thanks to major upgrades in public transportation.
In recent years, Medellín has poured resources into expanding its metro system, including the impressive 80 Metro line. This line stretches over 13 kilometers, featuring 20 trains and 17 stations, and it serves a significant chunk of the city's population, including those in San Javier. Residents now enjoy smoother commutes and a more connected lifestyle.
The 80 Metro line links key neighborhoods like Castilla, Robledo, Laureles, La América, San Javier, Guayabal, and Belén. This connection not only cuts down on CO2 emissions but also eases traffic congestion and reduces accidents. Cleaner air and less traffic are huge perks for anyone thinking about moving to or investing in San Javier.
There's a clear trend: property values tend to climb in areas with better transit access. Homes near public transport in lower-income areas can see their value jump by up to 17.1%. San Javier is poised for a property value boost as it becomes more accessible, making it a prime spot for buyers and investors.
With these transit improvements, San Javier is not just more connected but also more appealing. Efficient and eco-friendly commuting options are drawing attention from potential residents and investors alike.
As the area becomes more attractive, expect a ripple effect on local businesses and amenities. Improved transit can lead to a thriving community, offering more than just a place to live but a vibrant lifestyle.
Sources: City2City Network, SciELO
13) New green spaces and parks will boost the appeal of nearby residential areas
New green spaces and parks can make nearby residential areas much more attractive.
In Medellín, the introduction of green corridors and parks has led to a noticeable increase in property values. For instance, the Parques del Río Norte project is expected to significantly boost property values. People are generally willing to pay more for homes close to beautiful, green areas. The cooling effect and improved quality of life these spaces bring also contribute to this increase in value.
There's a growing trend of eco-conscious buyers who prefer properties with access to outdoor spaces. This trend is particularly strong in Colombia, where the demand for such properties has jumped significantly. People are increasingly looking for homes that offer a connection to nature, making areas with new parks more desirable.
Green spaces can also boost business activity and foot traffic. Projects like Parques del Río Norte include commercial spaces that attract more visitors, benefiting local businesses. Improved mobility and access to these green areas draw new residents, further increasing foot traffic and economic activity in the area.
In Medellín, the introduction of green corridors and parks has led to a noticeable increase in property values. For instance, the Parques del Río Norte project is expected to significantly boost property values. People are generally willing to pay more for homes close to beautiful, green areas. The cooling effect and improved quality of life these spaces bring also contribute to this increase in value.
There's a growing trend of eco-conscious buyers who prefer properties with access to outdoor spaces. This trend is particularly strong in Colombia, where the demand for such properties has jumped significantly. People are increasingly looking for homes that offer a connection to nature, making areas with new parks more desirable.
Sources: Energy Transition, ArchDaily, Green Policy Platform, The Latin Investor
14) Eco-friendly homes will become popular as buyers prioritize environmental awareness
Eco-friendly homes are gaining traction as people become more environmentally conscious.
In Colombia, over 20% of new buildings were certified under the IFC's EDGE program by 2023, highlighting a significant move towards sustainable construction. This shift is expected to grow as more buyers seek homes that reflect their eco-friendly values. The EDGE program, known for its rigorous standards, ensures that buildings are not only energy-efficient but also water and material-efficient, making them attractive to environmentally aware buyers.
The rise in eco-friendly homes is partly due to the increasing sales of sustainable building materials. Since green building codes were introduced in 2015, there's been a noticeable surge in green-certified buildings. This trend is fueled by the demand for modern homes that are energy-efficient, helping to cut down on energy costs and reduce environmental impact. Buyers are increasingly looking for homes that offer long-term savings and a smaller carbon footprint.
Consumer surveys reveal a strong preference for environmentally friendly homes. According to McKinsey & Company, consumers are willing to pay more for sustainable products, including eco-friendly homes. This interest spans various demographics, indicating a widespread desire for sustainable living. People are not just looking for a place to live; they want a home that aligns with their values and contributes to a healthier planet.
The Colombian government is also playing a crucial role in promoting sustainable construction. Through initiatives like the National Sustainable Construction Policy, the government aims to significantly cut greenhouse gas emissions by 2030 and achieve carbon neutrality by 2050. These policies provide incentives for buyers to choose eco-friendly homes, making it easier for them to invest in properties that support a sustainable future.
Sources: The Latin Investor, IEA, The Madrona Group
Everything you need to know is included in our Pack for Medellín
15) Luxury property rental yields will drop as affordable options increase
Medellín is seeing a boom in mid-range housing developments.
With more affordable rentals popping up, luxury properties are losing their edge in the market. Consumer surveys from 2023 and 2024 reveal that both locals and expats are leaning towards these budget-friendly options. This trend means luxury homes are no longer the top pick for renters, which is causing a dip in occupancy rates and rental yields.
Reports show that luxury property owners are slashing prices to fill vacancies. This price cut is a telltale sign of fewer tenants and is chipping away at the profits from these high-end rentals.
Sources: The Latin Investor, International Living
16) High-demand neighborhoods will keep stable rental yields due to strong tenant interest
High-demand neighborhoods in Medellín are set to keep their rental yields stable thanks to a steady stream of interested tenants.
In 2023, popular areas saw average accommodation prices hit $75 per night, a clear sign of strong demand from digital nomads and remote workers. These folks are flocking to Medellín for its affordable living and great lifestyle.
These neighborhoods aren't just popular; they're packed. Properties in tourist hotspots boast occupancy rates between 70% and 85% annually. In prime spots like El Poblado, vacancy rates are impressively low, hovering around just 2% to 4%. This means rental properties are rarely empty, keeping them profitable.
Medellín is also investing in its future with ongoing infrastructure projects, like expanding the metro system. These improvements are making neighborhoods even more appealing by enhancing connectivity and accessibility. Tenants love areas with efficient transport options, and surveys back this up.
With these upgrades, neighborhoods are becoming more attractive to those who value easy commutes. This is a big draw for tenants, ensuring a continuous flow of interest in these areas.
Sources: The Latin Investor, The Latin Investor
17) High-demand areas will see price increases due to limited supply
Medellín's property prices are on the rise, especially in high-demand areas.
Why? It's simple: there's just not enough land to go around. Even though there's potential for over 5 million m² of development, only about 1.6 million m² has been utilized over a 20-year period, according to a World Bank report. This bottleneck keeps supply tight and prices climbing.
Adding to the mix, Medellín is bustling with more people than ever. The city's population is growing, and with it, the demand for housing. The middle class in Colombia is expanding, thanks to economic stability and foreign investments, which means more people are looking for homes in urban hotspots like Medellín.
Infrastructure projects are also playing a role. With new metro and tunnel projects in the eastern suburbs, property values are expected to keep climbing. These developments make certain neighborhoods even more attractive, further driving up demand.
In some areas, property prices have historically risen by 10-15% annually. This trend is likely to continue, especially in neighborhoods benefiting from new infrastructure. The limited supply and growing demand create a perfect storm for price increases.
Sources: The Latin Investor, PPIAF, Nearshore Americas
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18) El Poblado's price growth will slow as investors target emerging neighborhoods for opportunities
El Poblado, once the crown jewel of Medellín's real estate, is seeing a slowdown in price growth as of 2023.
While prices per square meter for new builds hover around 11 to 12 million COP, the market is showing signs of leveling off. This has led to more properties lingering on the market, as investors shift their gaze to other areas. The buzz is now around neighborhoods like Laureles and Envigado, where property prices are more affordable and offer better value for money.
These emerging areas are not just cheaper; they’re getting a facelift with new infrastructure and amenities. Laureles, for example, is seeing a revival with renovations to its heritage buildings, making it a magnet for investors. The younger crowd is also flocking to these neighborhoods, drawn by their lively and youthful vibe.
Investors are also eyeing these areas for their higher rental yields. Some properties are offering yields up to 6.5%, which is quite attractive for those looking to earn rental income. Media reports and investor surveys are buzzing about these neighborhoods as the next big thing, especially with government plans to boost development.
With all these factors in play, it's no wonder that El Poblado is losing some of its shine. The smart money is moving to where the growth potential is higher and the entry costs are lower. As these emerging neighborhoods continue to develop, they’re becoming the new hotspots for savvy investors.
Sources: The Latin Investor, Primavera Realty Medellín, The Latin Investor
19) Envigado demand will surge due to its family-friendly vibe and school proximity
Envigado is becoming a hotspot for families, thanks to its family-friendly vibe and nearby schools.
Back in 2023 and 2024, Medellín saw a big jump in families moving in, drawn by the city's tech boom and better living standards. Envigado stood out because of its great amenities and schools, making it a top choice for these newcomers.
Schools in Envigado are buzzing with more students, mirroring the overall rise in student numbers across Medellín. This is largely due to the city's improved educational facilities and quality of life, which are big draws for families. Plus, many Colombians see homeownership as a solid investment, boosting demand for places like Envigado that offer both comfort and affordability.
Real estate reports highlight strong rental returns in Bogotá's suburbs, including Envigado, thanks to better transport links. This makes Envigado even more attractive to families looking for a place to rent. The tech scene in Medellín is also thriving, pulling in professionals who want to settle in family-friendly spots like Envigado.
Sources: The Latin Investor, UCF Facts, Migration Data Portal