As we already know, Colombia is a great tourist destination thanks to its beaches, mountains, and jungles that attract hundreds of tourists in search of adventure and new experiences, however and in addition to this, in recent years foreign investors and entrepreneurs see a wide opportunity to develop their businesses in our country, among those businesses, real estate investment turns out to be the most profitable and safe.
Colombia continues to recover from the economic crisis of 2020 caused by the pandemic, which saw a 7% drop in GDP. Fortunately, 2021 was a year of great growth where, on the contrary, the GDP had an increase of 10%, additionally, during the last decade, new housing has registered positive valuations 98% of the time, unlike what happens in the stock market assets, where this indicator does not exceed 69%.
The purchase of housing in Colombia has been increasing thanks to the stability in the construction sector, whether to live, rent or invest, it has become one of the most attractive sectors of the economy at this time. Therefore, here are some reasons why buying property in Colombia is an excellent decision.
As mentioned before, real estate investment allows adapting to the investor’s profile. In the case of home purchase, the risk is generally low and in addition to its use, it generates appreciation over long periods of time, which allows to secure and make the investment profitable.
The direct purchase of a real estate for investment allows a return from various sources such as rent, medium-term appreciation, short-term sale and purchase investments at market prices, and the possibility of leveraging larger investments.
In 2022, demand in Colombia will continue to be directed especially to new and used housing. Valuation expectations are like 2021 or higher, depending on supply and subsidies, but it is expected that we will have at least an 8% valuation with an inflation of 4%, and rents of at least 6% per year, which would give about 14% per year before taxes and insurance.
To promote investment projects in the country, the Colombian government promotes fiscal, tax, and even migratory incentives, as an example those who make a property purchase can obtain a visa for Colombian investment either for an investment of 350 minimum wages to obtain a Type M Visa or with an investment of more than 650 minimum wages to be able to obtain the Type R Visa and become a permanent resident.
Another type of incentive is the differential rent for new hotel projects that are built, remodeled, or expanded, this is very important since the purchase of property in tourist areas offers good returns.
The exchange rate of the dollar is one of the factors considered in the different sectors of the Colombian economy. The currency started the year on the rise surpassing the $4,000 barrier, an increase that will eventually have an impact on the cost of housing, however, considering that real estate prices are set in advance, 2022 is still an excellent time for real estate investment.
These variations are mostly positive also for Colombians living abroad or for foreigners interested in investing in Colombia. With the notable appreciation of currencies such as the pound sterling, the euro, and the dollar, this investment is even more profitable since it is possible to acquire a home at a price up to 30% lower than what was obtained a few years ago.
Interested in investing in real estate?
At expatgroup.co we have complete advice for the purchase of your property, from advice on the legalization of money, legal representation, and an accompaniment so you can get the Colombian Investment Visa, we accompany you throughout the process of buying property in Colombia.