The prices for new housing in Colombia increased 9.47% in 2014 per square meter according to a recent report by DANE, which is Colombia’s statistics agency. DANE’s housing study looked at the average price per square meter for new housing in the process of construction up until the ultimate unit in a new building had been sold. DANE looked at new housing prices in 23 cities in Colombia and also broke their results into both new apartments and new houses.
New apartment prices increased 8.63% in Colombia in 2014 per square meter, while new house prices increased 16.85% in 2014 per square meter. Prices for new housing in Colombia measured in terms of price per square meter have been rising faster than inflation in Colombia for several years as seen in the following table:
For example, the annual average rate of inflation in Colombia in 2014 was 2.89%, in 2013 it was 2.02% and in 2012 it was 3.15%. So new housing prices are growing faster than inflation in Colombia in terms of price per square meter.
Part of the price increase over the past several years has been a result of demand outpacing supply. Fewer housing units are being built in many cities in Colombia than are needed. Part of the price increase more lately has also been a result of the strong dollar, which has resulted in higher costs from some imported items used in construction (in terms of pesos).
New Housing Price Increases by City in 2014
Price increases for new housing in Colombia varied by city with prices in Cali and Barranquilla increasing faster in 2014 than the average in Colombia and prices in Pereira staying almost the same from 2013 to 2014. The following graph shows the annual new housing price increase in 2014 for several cities in Colombia:
In Medellín in 2014, prices for new apartments increased on average 7.92% and prices for new houses increased 7.81% per square meter. In comparison, in Bogotá in 2014, prices for new apartments increased on average 8.08% and prices for new houses increased 27.22% per square meter.
New Housing Price Increases by Estrato in 2014
DANE also looked at the prices change for new housing by different estratos (a socioeconomic scale) broken up into three categories: low (estrato 1, 2, 3), medium (estrato 4) and high (estrato 5 and 6). Price increases for new housing vary by estrato and by city as seen in the following table:
In Barranquilla, Bogota and Medellín, the biggest price increase for new housing was seen in 2014 in the medium estrato 4 neighborhoods. While in Cali and Armenia the biggest price increase for new housing was seen in high estrato (5 or 6) neighborhoods. Armenia, Bogotá and Bucaramanga experienced lower prices per square meter in low estato neighborhoods compared to 2013. This is likely due to a government-sponsored program to provide free housing to some of the poorest residents.
The Bottom LIne
New housing prices are increasing rapidly in Colombia in terms of price per square meter in Colombian pesos. But the recent strong dollar has actually decreased prices significantly in terms of U.S. dollars or other stronger currencies.
21,000 new housing sales are expected in Antioquia in 2015, which is why you continue to see a boom of high-rise apartment buildings being built throughout the Medellín metroplex.
However prices for existing housing in Colombia are not increasing as fast as new housing prices. Prices for new apartments in El Poblado in Medellín can now be as high as 5 million pesos per square meter ($2,013 per square meter). But existing homes can be found for much cheaper prices as seen in our recent survey.
If you want to save money, the best way is to buy an existing property, which can be much cheaper than many of the new properties. First American Realty currently has listings for over 350 properties in the Medellín area to choose from.