Colombia’s middle class is on the up. Property prices, which can be as low as $100,000 for a 1,000-square-foot condo, reflect Medellín’s past, not its future potential. (Note that real estate here sells in Colombian pesos, so international investors are also getting diversification from their home currency.)
A number of multinationals, such as Hewlett-Packard, are making Medellín their home. Domestic Medellín-based multinationals are strong in cement, financial services, and food products. The action for big oil and banking is in Bogotá – a city already bursting with traffic jams and choking in smog. (It’s getting expensive, too.)
I believe the best opportunities are to be found in Medellín, but confidence is everywhere in Colombia. When I visited Santa Marta and neighboring resort towns, condo buildings were shooting up on beachfront plots. They were selling fast, too, long before the buildings were finished.
These aren’t cheap. A decent condo with a view could set you back $300,000. The buyers are Colombians living either in Medellín and Bogotá or abroad in the US and Europe. Five years ago, they would have bought condos in Miami or Panama. Now they have the confidence and comfort to invest themselves and their money in their home country.
This is an amazing story, and one that goes beyond the real estate market. Fifteen years ago, Colombia was almost jungle. They battled the army and paramilitaries. Drug cartels ran many of the big cities. Fast-forward to 2013, and you have what many are calling the “Colombian comeback”: the big shift from almost-failed state to emerging global player.
This hasn’t happened overnight. Nor is Colombia rid of the security issues that maimed and killed people, and ripped its economy apart. If you are trying to pipe oil hundreds of miles through jungle or prospect for gold in remote areas, surrounded by armed guerrillas and gangs who are politically or profit motivated, the threats are clear.
Don’t expect Colombia’s progress to be without disturbance. Scary pictures will flash across your TV screens from time to time. But it’s precisely because the situation isn’t perfect that we have this opportunity to buy low and sell high.
Again: Colombia is on the up. Its citizens are already enjoying a peace dividend. They won’t easily hand that back. The fighters and revolutionaries are old and tired. If Colombia comes close to reaching its potential, it will live up to its mantra as “the next Brazil,” where real estate values rose by up to 20% year after year after year.