Since the year of 1997, the Medellin Real Estate Market has seen plenty of ups in contrast to a singular dip in 2017. Yes, it's true, and the reports by DANE (Administrative Department of Statistics) can confirm it. While the dip lasted for a good part of the year, the total new purchases were only 172k against 173k from the previous year.
How is it a dip then, you might wonder? Well, the year prior to 2017, total new purchases were over 192k, whose annual investment was COP 36+ bn (~$12m). When it is compared with the annual investment figures of 2017, i.e., COP 32+ bn (~10.9m), the difference is stark but not drastic.
Following those years of 2016-2018, the Medellin Colombia Real Estate market has only seen ups and steadily.
The Unbelievably Bullish Medellin Colombia Real Estate Business!
Before we get to the part that justifies why it's unbelievable, let's look at some more data. The effects of the 2018 real estate market culminated with stabilization as the building materials were consolidated as surplus inventory. It ultimately benefited the social interest housing (Vivienda de Interés Social, VIS) development market.
The VIS Housing contributed over 102k real estate sales or 60% of the annual real estate investment in 2018. The region per region sales from 2018 in Medellin was as follows:
Bogotá (14.5%) & Norte de Santander (40.6%)
Cundinamarca (22%) & Boyacá (24%)
Apart from these figures, it's worthwhile to note that Antioquia, the home to Medellin, produced over a tenth of the national GDP in 2017 (16.5%) with its annual real estate investments.
The Affordable Home Ownership Initiatives By Medellin Government
The period between 2012-2016 did boost the Medellin Real Estate sector, driven by government initiatives to subsidize housing for low and medium-income families. But, it was in 2018 that the results of those initiatives started to appear countrywide. In September 2018, the mortgage portfolio-to-GDP depth of Colombia was 6.7% which has deepened to ~8.4% in August 2022.
Similar initiatives were also offered to investors and businesses for commercial re-development purposes in Medellin. As an example of the outcome, the Medellin region, to date, has the biggest mall in the country named Viva Envigado, a 140,000-sq-meter property.
Another report adds that between 2018-2022, over 90% of the new sum comprised build-to-suit (BTS) projects, which saw tenants and developers work closely to develop industrial spaces.
Is the Medellin Colombia Real Estate Sector for You?
Per the reports and figures, the real estate market concerning the housing sector continues to grow strong year on year. As for the earlier use of the term 'unbelievable' regarding the Medellin property business, the gains for the housing market were over 9% post-pandemic. It is despite the fact that the overall cost of construction rose by more than 4% by 2021!
Despite the rising costs, inflation and taxes, the real estate market in Colombia and Medellin continue to flourish. The Q2 2022 figures for the Housing market were 111.93 points compared to the 109.32 from Q1 2022.
Comparing these figures with Jan 2021 Housing index points of just 100, the latest figures are an affirmation of a bullish market. Moreover, the forecast model based on multiple factors like GDP, inflation, taxes, etc., collectively points to the Housing Index growing past 114 by Q3 2023.
Lastly, the increment of real estate prices growing by 85% in Colombian Pesos between 2011-2018 is another conformity towards a positive investment opportunity.
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