© The Financial Times Ltd 2016 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
February 7, 2014 6:16 pm
Colombia’s capital, Bogotá, has had a reputation for kidnapping, contract killing and cocaine trafficking since the 1970s. Violence has forced affluent professionals to flee the city and thwarted the country’s efforts to attract foreign investment.
For many years, the historic La Candelaria district was seen as one of the most dangerous parts of the city. Rife with drugs and gun crime, the cobbled streets and crumbling colonial buildings were often squalid, and deemed to be among the worst places in the city to invest in property.
Yet La Candelaria is now at the centre of a surprising renaissance sweeping through much of this sprawling South American metropolis: churches, government buildings and museums have been renovated; parks and plazas have been cleaned up and now bustle with tourists.
Crime has been curbed considerably. The murder rate in Bogotá is at a 27-year low, according to the Colombian Ministry of Defence: it dropped to 32 murders per 100,000 residents in 2012 – down from nearly 60 in 2003 and 80 in 1993.
Kidnappings, a favourite weapon of the Revolutionary Armed Forces of Colombia (Farc), have also declined substantially.
“Cutting crime is having a positive effect on property investment,” says Sam Miller, director-general of Colombia International Real Estate, an estate agency that caters for international property investors. “Safety and security are especially important to foreign buyers, so significantly reducing crime is part of the city’s success.”
This revitalisation is helping Bogotá shed its narcostate image and persuading property buyers that the culturally vibrant city is safe for investment. After several years of double-digit growth, house prices have increased around 8 to 10 per cent per year for the past three years, estimates Angel Seda, founder and chief executive of Royal Property Group, a real estate development firm.
“The luxury sector, in particular, is expanding,” says Seda, a native of Los Angeles, California, who began selling real estate in Colombia in 2004. He launched a full-service property investment firm last year.
“Areas of Bogotá that were off-limits just a few years ago are now full of tourists and gaining investment,” he says.
Colombia’s strengthening economy is also lifting Bogotá’s property market, while swelling the ranks of the country’s wealthy. Per capita income across the country grew from around $4,400 per person in 2000 to over $6,990 per person in 2012, according to World Bank figures.
The prospering economy is creating millionaires faster than in Mexico or Brazil, according to WealthInsight, a research company. Fourteen-thousand new millionaires were created over the past five years, putting Colombia’s total millionaire population at 35,900 at the end of 2012. That is a rise of 49 per cent since 2007, WealthInsight data shows.
With just under 8m inhabitants, Bogotá is Colombia’s most populous city and the second-largest city in South America.
Surrounded by the Andes mountains, the city sits 8,612ft above sea level, affording many unobstructed mountain views and relatively consistent temperatures throughout the year. The average temperature in summer is about 18C.
La Cabrera, Santa Barbara and Rosales to the north and Seminar and Usaquen towards the northeastern hills of the city are among Bogotá’s most expensive areas for property.
New condominium developments in these districts can range in price between $5,200 and $9,300 per sq metre depending on the size and location of the home, says Verónica Dávila, an estate agent with Julio Corredor & Cia, an affiliate of Christie’s International Real Estate. Renovated single-family homes in these districts generally range in price from $4,600 to $7,250 per sq metre, Dávila says.
Engel & Völkers is marketing a four-bedroom, four-bathroom home in the Santa Barbara district for $2.89m. The house measures 5,629 sq ft with an additional 78 sq ft of terrace space which has unobstructed views of the Cordillera Oriental, the widest of the three branches of the Colombian Andes.
The residence sits in a condominium complex that includes a swimming pool, tennis court and security system, according to Vanina Orellana, an estate agent with Engel & Völkers.
A five-bedroom apartment in the Montearroyo district is on the market for $2.49m with Century 21 Global. It measures 700 sq metres with eight bathrooms and private parking for up to five vehicles. The home has 9ft high ceilings and hardwood flooring throughout. It also has a wine cellar and a private terrace with views of the city.
Like any big city, homelessness and street crime still bedevil parts of Bogotá. Higher crime areas include the low-rent districts of Corabastos and El Bronx, where petty crime and drugs remain a problem, estate agents say.
The UK Foreign Office and the US Department of State still warn its citizens to be vigilant when travelling in parts of the capital and in Colombia as a whole. And, although the language in these warnings is milder than in the past, the US State Department says violence linked to narco-trafficking continues to affect some rural areas and parts of large cities.
• There are no restrictions on foreign buyers in Bogotá
• Colombian banks expect a deposit worth 30 to 40 per cent of the property’s total value
• Interest rates at Colombian banks are about 16 per cent
• Commissions for real estate agents range between 3 and 5 per cent of the purchase price and are paid by the seller
What you can buy for . . .
$500,000 A one-bedroom apartment in a renovated condominium building in the La Candelaria district
$3m A four-bedroom home measuring 200 sq metres in the northern districts of Chico
$5m A penthouse with floor space measuring 3,000 sq ft, a 24-hour doorman and fitness centre.
Five of the best
1. Taganga Contemporary
Taganga is a small fishing village north of Bogotá. The popular tourist location typically attracts second-home buyers looking for a relaxing weekend spot. This contemporary four-bedroom property was built four years ago and sits just a few minutes’ walk from Tayrona National Park and the popular coastal destination of Santa Marta. It comes with central air conditioning, a jacuzzi and panoramic mountain views. Colombia International Real Estate is marketing it at $2.25m.
2. White Contemporary
This contemporary home is located in the El Refugio district of Bogotá and is priced at $2.49m. It has five levels and measures 581 sq metres with four bedrooms and five full bathrooms. The property, marketed by Century 21 Global, was built in 1980 and comes with a large garden, swimming pool and several terraces. There is also a private five-car garage.
3. Condo in Sopó
This condominium development, called the Toscana Project, is under construction in the town of Sopo located just outside the capital. It is being designed and built by Disarco, a noted construction firm with upmarket projects across Colombia. Engel & Völkers is marketing the project which will consist of 63 homes that will have lot sizes ranging from 1,700 sq metres to 2,500 sq metres. The property will have a fitness centre, tennis courts and a swimming pool. The homes will range from 270 sq metres to 450 sq metres with starting prices of $2,350 per sq metre.
4. Cartagena Mansion
Wealthy Colombians have been flocking to Cartagena’s beaches for decades. The oceanfront location is about a two-hour flight from Bogotá. This 11-bedroom Colonial-style mansion is marketed by Julio Corredor & Cia for $15m. It has marble floors and two swimming pools, including a temperature-controlled outdoor pool. The elevator building has 13 bathrooms, a spa with sauna and fitness centre.
5. Gated Casa
This two-storey property sits within a gated community in the district of Guaymaral, a fairly affluent suburb in the north of Bogotá. The living space measures 350 sq metres on a lot size of 1,580 sq metres. The residence has three bedrooms which are en suite. It is being marketed by the Royal Property Group at $2m.
This article has been subject to corrections since publication
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.