The recently improved exchange rate for the Colombian peso makes Medellín property much cheaper in terms of US dollars. The Colombian peso exchange rate has been in a range from 2349 to 2459 pesos to the US dollar over the past month, which is the highest range it has been in over five years.
What does this mean? The bottom line is that property is now much cheaper in Medellín if you are buying with US dollars. The prices of property in Medellín are in pesos, which have been increasing at perhaps 7 percent per year in good neighborhoods. But the exchange rate is now about 35% better than it was two years ago and about 25% better than just over a year ago.
If you have dollars and are liquid, Medellín might now be the best real estate deal on the planet.
Prices are now cheaper across the board in terms of US dollars in the three most popular neighborhoods for foreigners in Medellín. (Note: using current 2,386 pesos to the USD exchange rate).
We looked in more detail at El Poblado back in September. Most of the foreigners owning property in Medellín call the upscale neighborhood of El Poblado as home. El Poblado is a wealthy neighborhood that offers a Western lifestyle, which is why it continues to be very popular with foreigners.
New apartments in El Poblado generally cost around 4,000,000 to 5,000,000 pesos, which is now $1,676 to $2,096 per square meter. This means a new 1,000 square foot apartment in El Poblado can now range in price from about $155,613 to $194,725.
The price for existing housing can be lower than new housing in El Poblado. The average cost of 50 existing properties I surveyed recently (sized at 90-120 square meters) in El Poblado was $1,221 per square meter. However, some of these existing housing properties are “fixer-uppers”, needing some work.
First American Realty, the largest foreign-owned real estate firm in Medellín, has over 250 property for sale listings in El Poblado listed on the First American Realty website (72% of its total listings).
We looked at Envigado back in August last year. Some foreigners have discovered Envigado, which is located directly south of El Poblado, where real estate can be a bargain in comparison, with the potential for faster appreciation. Envigado is primarily a residential community – you won’t yet find any hotels in Envigado like are found throughout El Poblado.
In Envigado, you will find a few neighborhoods similar to El Poblado with high-rise apartment buildings. But throughout most of Envigado you will quiet streets lined with one-story, two-story and three-story attached homes that are more difficult to find in El Poblado.
Prices for new apartments in Envigado can range from about 1,300,000 to 3,700,000 pesos per square meter, which is now $545 to $1,550 per square meter. This means a new 1,000 square foot apartment in Envigado can range in price from about $50,632 to $144,000. This wide range of prices is driven by the estrato, features, quality and location/view of properties. Some low cost new properties in Envigado are found in low estrato 1 or 2 neighborhoods that are not really appropriate for foreigners.
The price for existing housing can be even lower in Envigado. The average cost of 50 existing properties I recently surveyed in Envigado in nicer neighborhoods was $903 per square meter, which is about 26% cheaper than similar properties found in El Poblado. It is possible to find properties in nice neighborhoods in Envigado that can be up 50% cheaper than the price of properties in El Poblado – but many of these properties are also “fixer-uppers”, needing some work.
We looked at Laureles/Estadio back in October, which is a popular alternative to El Poblado. Laureles is located north of Belén and west of the Medellín River and is where real estate can be somewhat less expensive than found in El Poblado.
Laureles/Estadio is an older neighborhood without many new apartments being built. New apartments, when they can be found, are typically in the range of 2,800,000 to 4,000,000 pesos ($1,173 to $1,676) per square meter. This means if you find a new 1,000 square foot apartment in Laureles/Estadio it can range in price from about $108,975 to $155,613. This range of prices is driven by the estrato, features, quality and location/view of properties.
The price for existing housing can be even lower in Laureles/Estadio. The average cost of 50 existing properties I recently surveyed (sized at 90-120 square meters) in Laureles/Estadio in nicer neighborhoods was $844 per square meter, which is about 30% cheaper than similar properties found in El Poblado. It is possible to find properties in nice neighborhoods in Laureles/Estadio that can be up to 40% cheaper than the price of properties in El Poblado – but many of these properties are also “fixer-uppers”, needing some work.
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 the strength of the US dollar (anticipation of raising interest rates in the United States.). While the exchange rate may stay in the range it has been over the past month for a while longer, this is not guaranteed.
With the improved exchange rate it is now possible to find existing housing in nice neighborhoods like Envigado and Laureles in Medellín for less than $85 per square foot (less than $85,000 for a 1,000 square foot property) – the improved exchange rate makes for the best real estate deal in Medellín in several years.
If you want to save over 25% on Medellín real estate compared to over a year ago, now is the opportunity!
Call First American Realty at 305 393-8872 or 954 363-1169 or email [email protected] and the company will send you more information about the real estate opportunities in Medellín.