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Americans and Spaniards, the foreigners most interested in buying a house in Medellín

Posted by thinkinco on October 24, 2022

Among foreigners, one out of every two inquiries to buy or lease is made by Americans.
“Known as the City of Eternal Spring, Medellín offers more than good weather all year round (…) it was voted the best in the world for eating and drinking, the same goes for nightlife and community spirit”.

This is how the international magazine specialized in tourism, Time Out, referred to the Antioquian capital, which ranked Medellín as one of the three best cities in the world to travel to, along with Edinburgh, the Scottish capital, and Chicago, United States.

It is becoming more and more normal to meet people from other countries in any part of the city or even have them as neighbors. There are even places where the foreigner seems to be the paisa due to the density of foreigners. So much so that visitors are more frequently looking for the best areas to buy or rent a house.

This is indicated by a report of the real estate platforms Trovit and Properati, shared for EL COLOMBIANO, in which it was found that people from at least seven countries are boosting the business. Americans, for example, perform one out of every two searches (49%) among foreigners to buy a home in Medellín.

Spaniards, meanwhile, make 16% of the queries, while Panamanians, Chileans and Canadians report indicators of 3% each. Mexicans and Swiss complement the “top” of searches with 2%.

“There is a market (real estate in Medellin) where foreigners arrive. And today, with the exchange rate issue, there are more of them. Undoubtedly, it is a segment that has been permeated by foreign investment,” says Federico Estrada, manager of La Lonja Propiedad Raíz de Medellín.

According to him, “one finds in the conversation with real estate agents that there is an influx of foreigners for investment, either Colombians abroad or people from abroad who come to the country and remain with some interest”.

Although internally the exchange rate and the effect of the increase in interest rates, among other factors, have been affecting the dynamics of the real estate sector, foreigners see a good opportunity, since the dollar above $4,000 favors them.

Data from the Bank of the Republic indicate that in the first half of this year, Foreign Direct Investment in the construction sector in Colombia totaled US$236 million, which is equivalent to an increase of 31% compared to the first half of 2021.

In the upper class

The question is, what are the places in the city that attract foreigners to buy homes? Ángela Puerta, director of Properati and part of Lifull Connect, assures that because they have strong currencies, both Spaniards and Americans have the means to look in high class areas (strata 5 and 6).

Thus, the expert mentions El Poblado and Laureles Estadio as the Medellín communities where the neighborhoods preferred by this market segment are located; and adds: “In the Metropolitan Area of the Aburrá Valley, interested parties are inclined towards strata 5 and 6 neighborhoods in Envigado, such as La Loma del Escobero, Loma de las Brujas, Loma del Esmeraldal and Loma del Chocho; strata 5 neighborhoods in the lower area of Sabaneta, such as San José, Aves María and Tres Esquinas, are also sought after.”

In general, the areas of the city that arouse interest can be priced at $4.6 million per square meter, or up to $6.3 million as observed by Properati’s data team in the last six months; meanwhile, prices of $6 million have been seen in Envigado and $5 million in Sabaneta.

Camaco figures

At this point it is worth mentioning how Camacol figures show that so far this year until August 18,353 new homes were sold in Antioquia, of which 1,961 registered a value of more than $500 million for sale, which is the segment that raises more interest in foreigners.

Particularly, March was the best month for the transfer of this type of real estate in the department, since 335 properties were sold, while June was the least dynamic with only 155.

In this context, Martin Monzon, CEO of the Fincaraíz portal, indicates that Medellin is the second city in the country with the largest real estate market (behind Bogota), so investing in this business “is a good option”,

One of the strengths of the capital of the paisa is the diversity of the offer. “Between January and August 2022, through the Fincaraíz portal, an average of more than 23 thousand properties have been presented monthly for sale and more than 8 thousand for rent”, assures Monzón.

An interesting point is that apartments are the housing with the largest number of available units, with more than 17,000 for sale and more than 5,000 for lease every month. “On the other hand, houses present a monthly average availability of more than 4,000 units for sale and more than 1,800 for rent,” adds Monzon.

It should also be noted that in the study “Keys for the purchase and leasing of housing in Colombia” conducted by Fincaraíz and Finco, it was highlighted that the average appreciation of real estate throughout the city was 6.8%. Even in areas such as El Poblado and Guayabal, the valuation reached a maximum of 12%.

“In this same study, an analysis of the profitability of real estate was made, reaching an average value of 1.56% (in Medellín) in the first quarter of 2022. Meaning that a year, a property that is available for lease can generate more than 6% profitability in the city,” say the firms in question.

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