Why Invest In Bogota, Colombia?
Updated April 13, 2024. Bogotá is everything a capital city should be. It is the economic, cultural and artistic heart of Colombia. Bogota should be thought of as a vibrant core and a beam of modernity. This mix is the quintessential feel of a country that is held together between the exotic Caribbean and the captivating Andes. Bogota is so much more than a mere springboard to South America. Bogota is, in fact, one of the best Colombian experiences! But the big question is, why should you invest in real estate in Bogota, Colombia?
Facts About Bogota, Colombia
Colombia’s capital city of Bogotá, the Capital District, is the country’s largest city. The population of Bogota is estimated to be at 8 million. 3 million of these people live in the areas immediately surrounding Bogota. Meaning there are 11 million people living the greater Bogotá area.
Moreover, it is also interesting that Bogota is the fourth highest capital city in the world. The altitude of Bogota is 8,600 feet or 2,640 meters above sea level. For people reading from the U.S., the city of Denver, Colorado, also called the Mile High City, has an altitude of 5,280 feet above sea level or 1609.3 meters. So, Bogota is a high city!
Bogota, Colombia Is Rapidly Growing
In the last few decades, Bogotá has been expanding rapidly. Bogotá has rising tourism, a booming economy with high consumer confidence, an expanding middle class, and falling interest rates.
Not to mention, the cultural, historic highlights that make Bogota one of the of Latin America’s most rewarding destinations. “It’s a city that’s starting to catch up and come up after being held back for a long time,” said Sam Miller. Miller is a Canadian that moved to Bogotá years ago. He loves living in Bogotá, Colombia because the air temperature is so much better than living in Canada.
Sam Miller co-founded a real estate investment company called Colombia International Real Estate (a subsidiary of Lifeafar). Miller said in a recent interview, that there are tremendous opportunities “with a growing middle class and one of the largest English-speaking populations in Latin America.
As a result, Bogota, Colombia now completes for international home buyers. The sprawling metropolis of Bogotá now has sleek skyscrapers, and some of the finest restaurants, nightlife, museums, and shopping scenes in Latin America. Let’s look at those opportunities now in Bogotá for tourism, economy, and the real estate property market forecast predictions.
Growing Tourism In Bogota, Colombia
In Bogotá and across all of Colombia, tourism is on the rise. Over the last decade or so, tourism in Colombia has soared by more than 300%. The tourism has risen from one million foreign visitors in 2006 to more than three million in 2017. Colombia is a country that has seen unprecedented tourism growth over the last ten years. Consequently, Bogotá continues to lead the way as Colombia’s most popular destination for foreign visitors.
According to Ministry of Tourism data in 2018, Bogota receives 51% of the country’s total tourist traffic, followed by Cartagena at 11%, and Medellin with 10%.
Between 2011 to 2017, the number of annual passengers arriving at Bogota’s El Dorado International airport jumped from 20 million to 31 million. Airlines have added new direct flights to Bogota from destinations like Amsterdam, Europe, and Los Angeles to accommodate the rapid increase in Bogota travel.
In 2019 and beyond, we expect steady tourism growth to continue across Bogotá and all of Colombia. Likewise, Colombia continues to shed its dangerous reputation. Subsequently, Bogota will continues to receive glowing press releases and is building its name as South America’s hub for technology and culture.
The ever-evolving city of Bogota is forecasted to continue to attract a steadily growing stream of business travelers and government workers. These business travelers and government workers are in addition to the tourists, vacationers, and remote workers attracted to the city. If you would like to invest in real estate in Bogota, Colombia, please let us know.
Economic Growth In Bogota, Colombia
All of Colombia has seen tremendous economic growth over the last ten years. The country’s economic prosperity is evident in Bogota’s positive indicators. As the seat for government and business in Colombia, Bogota averages around 30% of the country’s GDP. In particular, the city is home to most of the multinational corporations. As well as national and governmental agencies in the country.
In its American Cities of the Future report for 2017/18, the fDi Intelligence research center recognized Bogotá as having the second-best strategy for promoting foreign direct investment in South America. Bogota was second only to Sao Paulo, Brazil.
Currently, the local economy is primarily based on the service sector, including financial services and telecommunications. Looking to 2019 and beyond, we expect to see solid growth in Bogotá’s tourism and agricultural sectors.
Over the next ten years, a steady economic upturn is forecasted to continue in Bogota and across the country. This is due to increasing oil prices, steady private consumer consumption, and recovery of non-oil exports, among other variables.
Real Estate Investment Opportunities
The Bogota real estate opportunities are fantastic. Bogotá (and all of Colombia) has enjoyed historic real estate growth over the last ten years. Under the administration of President Álvaro Uribe in 2003, Colombian real estate prices took a massive uptick after crime rates have decreased. Since then, property market prices have gone up steadily across Colombia, rising an average of 8% per year in Bogotá.
In our opinion, Bogota is definitely a very exciting global investment opportunity to consider. If you would like to invest in real estate in Bogota, Colombia, please let us know.
Understanding Housing Estratos
To understand real estate opportunities within the city, let’s understand how the government housing stratum system works.
In Colombia, homes are ranked in socio-economic categories known as estratos. Estrado 1 are the least expensive and Estrato 6 are the most expensive properties. Bogota has four or five estrato 6 areas versus the single estrato 6 area in Medellín. According to Rich Holman, chairman of Lifeafar, Bogota properties in estrato 6 can be as much as 40 to 60% more expensive than the same properties in Medellin.
In particular, the Bogota’s rapid economic growth and expanding middle class are putting pressure on the upper estratos. This in turn is driving up demand even further in these already pricey areas. As a result, as real estate becomes more difficult to obtain, opportunities lie in new upcoming neighborhoods that have been previously overlooked.
It should be noted that with the majority of its properties in estrato 3 and 4, the increasingly trendy Chapinero Alto is a great example of an emerging barrio.This emerging barrio has a lot of room for growth (the term barrio in Colombia is used to describe any urban area neighborhood whose geographical limits are determined locally).
Therefore, more home buyers, renters, and business owners seek affordable pricing in neighborhoods like Chapinero Alto. The increased demand and urban renewal are likely to translate to increased property prices. Consequently, investors who purchase properties in up-and-coming neighborhoods now will likely see substantial returns as real estate prices continue to climb in Bogota and across Colombia.
USD Strength Compared To The Colombian Peso
Yet another attractive reason to invest in Bogotá real estate is the current currency exchange of the Colombian peso (COP) against the U.S. dollar.
Photo credit: BBVA Research.
November 8, 2022 update. In Colombia, people see the purchase of housing as a great investment. The current currency rate against the US dollar continues to be a favorable opportunity to acquire new housing with exceptional financing conditions and interest rates. New homes in Colombia grew by 9.4% in 2021.
In addition, the vision for 2022 continues to be encouraging. In 2022, is projected that investment in housing will grow by 10.6%, with more than 240,000 units sold.
March 26, 2019 update. As of March 26, 2019, the COP is trading at 3,144 to the USD compared to 1,872.5 on this day eight years ago.
To illustrate, the present-day U.S. dollars investor holds 67% more buying power than investors eight years ago. Similarly, for 2019 buyers with U.S. dollars, the undervalued COP makes high-quality real estate in a rapidly appreciating market a global bargain. Furthermore, with the great exchange rate these days for the US dollar, the Colombian markets are very appealing when looking to purchase real estate.
The Bottom Line For Real Estate Investment
In conclusion, tourism and economic factors continue to improve in Bogota. In our opinion, we do not expect the rate of real estate to slow down in the next five to ten years. Sam Miller says that “in emerging neighborhoods like Chapinero Alto, we see unparalleled opportunities for substantial returns as real estate demand continues to climb.”
Thus, imagine five to ten years of growth in real estate as demand continues to climb with an average of 8% a year in Bogota! So, invest in real estate in Bogota, Colombia! Bogotá is everything a capital city should be as the tourism and economic factors continue to improve.
In future articles I will investigate different neighborhoods for investment. We will explore the neighborhoods of Usaquen, Chapinero, and Chapinero Alto. We will give you our thoughts as we look at potential properties for growing wealth through real estate investments. In our opinion, Bogota is definitely a very exciting global investment opportunity to consider. If you would like to invest in real estate in Bogota, Colombia, please let us know.
Please read my blog on how Everyone Can Buy And Own Property In Colombia. We recommend doing more due diligence on specific property regions and areas you may be interested in. We would also recommend looking at property in Bogota or property in Medellin. Both of these locations have the potential for excellent returns. If you have a question or need more help, please send us a message.
Last Updated on April 13, 2024 by Financial Goodness
Financial Goodness
George Alexander Roy III and our team are experts in helping you to seek wealth through investing and tips on how to succeed. Join us at FinancialGoodness.com to increase your knowledge through education in the areas of personal finance, real estate, and investments. George has been an owner of a real estate investment business that focuses on wholesaling, fix & flip, and long-term buy-and-hold property strategies with a consistent increase of annual revenues. Consequently, as an entrepreneur, researcher, writer, and speaker he has sought the truth in everything he does, no matter how difficult. Hopefully this value and service will help each person achieve their financial freedom sooner.