A recent post on the U.S. News website claims “Colombia now offers the most affordable retirement real estate options in the region.” The recently improved exchange rate for the Colombian peso has made Colombian real estate a bargain in terms of U.S. dollars as we recently covered in an article entitled, “Medellin Might Be the Best Real Estate Deal on the Planet”.
In the U.S. News post it reported the average cost of real estate in Medellín as $1,145 per square meter at the current exchange rate. However that is not an accurate representation of costs in the city. That cost is roughly the average for existing properties in El Poblado, which is the most expensive neighborhood in Medellín. But costs vary depending on neighborhood in Medellín and there is also a range of prices in each neighborhood.
The average cost of 50 existing properties I surveyed recently (sized at 90-120 square meters) in El Poblado was 2,913,306 pesos per square meter ($1,173 per square meter) for existing property in El Poblado.. New apartments in El Poblado generally cost even more – around 4,000,000 to 5,000,000 pesos per square meter, which is $1,610 to $2,013 per square meter at the current exchange rate (using 2,484 pesos per USD).
It is possible to save substantially over the prices in El Poblado in neighborhoods such as Envigado and Laureles/Estadio, which are additional neighborhoods in Medellín that are also popular with foreigners. The average cost of 50 existing properties (sized at 90-120 square meters) I recently surveyed in Envigado in nicer neighborhoods was 2,154,558 pesos per square meter ($867 per square meter at the current exchange rate), which is about 24% cheaper than similar properties found in El Poblado.
The average cost of 50 existing properties I recently surveyed (sized at 90-120 square meters) in Laureles/Estadio in nicer neighborhoods was 2,013,784 pesos per square meter ($811 per square meter at the current exchange rate), which is about 29% cheaper than similar properties found in El Poblado.
Other Cities in Colombia?
The U.S. News post also looked at real estate in Cartagena and Cali. Real estate in Cartagena is generally more expensive than in Medellín with its beach locations and being a UNESCO World Heritage Site. However Cartagena is also very hot with humidity that averages 90% and a high temperature that averages near 90 degrees Fahrenheit each day. Cartagena also has higher ongoing costs of living than Medellín.
Real estate in Cali is generally less expensive than in Medellín. However Cali doesn’t yet have much of an expat presence due to its greater security concerns. Cali currently has the highest homicide rate out of all cites in Colombia with 65.25 homicides per 100,000 population in 2014, which makes Cali the city with the ninth highest homicide rate in the world.
The Bottom Line
The dramatically improved exchange rate for the US dollar to Colombian peso is primarily due to the weakness in the price of crude oil (Colombia is a big oil exporter) and strength in the US dollar. This has made for a real estate buying opportunity in Medellín and other cities in Colombia when buying with U.S. dollars.
I have seen some publications like U.S. News and others depict the prices of real estate in Medellín by using the prices of real estate El Poblado. But it is possible to save an average of 24-29% over El Poblado in the neighborhoods of Envigado and Laureles/Estadio or even more in additional neighborhoods in Medellín.
Several publications including Businessweek, U.S. News and Huffington Post have previously called Medellín a great retirement location. We believe the city will now be seeing increased interest with the lower costs of real estate in terms of U.S. dollars.