In the midst of a challenging scenario for the real estate sector in Colombia, intermediate cities are positioned as promising destinations for investment.
This is confirmed by the most recent report by MTS Consultoría + Gestión, which highlights that despite the reduction in home sales and the complex economic moment that the country is going through, cities such as Bucaramanga, Manizales, Pereira and Ibagué are experiencing significant growth in the real estate sectorresult of investment in infrastructure and economic development.
At the end of May, The real estate sector at the national level presented a 70% decrease in home sales in the country, compared to the same month of the previous year. A similar situation occurs in the non-residential sector, which has been reducing construction license applications by two digits, closing for the month of March at 25.1% less, according to Dane.
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“In the short term, I don’t know about new shopping center projects and currently real estate funds are waiting to make new investments,” says the consultant.
However, at the national level, the real estate sector has presented positive results for other sectors. An example of this is the logistics sector that has had an increase in 36% occupancy, corporate with an increase in rental prices of 2.1%. Likewise, shopping centers have presented a decrease in vacant areas of 44% after the pandemic.
In the midst of the current challenges facing Colombia politically and economically, “The country has managed to maintain momentum in the industry due to the good decisions of builders and investors that have avoided the increase in inventories, market imbalances and construction in segments with less demand”says Gustavo de la Torre, Real Estate Director for Latin America, at MTS Consultoría + Gestión.
This increase in interest is seen above all in intermediate cities, which due to their growth, the increase in their appreciation and their attractiveness both for living and doing business, are ideal for investing and building. According to the results of the 2022 Cities Competitiveness Index, for example, the city of Bucaramanga ranks fifth with a score of 6.26 out of 10, Manizales 6th with 6.21Pereira on 7 with 5.95 and Ibagué on 11 with 5.58.
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According to Ana María Mejía, Latin American market leader at MTS Consultoría + Gestión, “As the country moves towards economic recovery and the necessary measures are taken for it, intermediate cities will emerge as key drivers for real estate development in Colombia”recognize.
He further points out that due to this promising potential investors, developers and players in the sector are looking to take advantage of the opportunities in these markets.
“Even with the current difficulties, the Colombian real estate market offers opportunities in different cities to continue its development and contribute to boosting the country’s economy”the report states.
“Undoubtedly, the recovery of the construction sector will be essential to boost the country’s economic growth. Construction activities contribute 13.5% of GDP and 7.3% of employment in the country”says.
In addition, recognizes that these four cities have potential due to their infrastructureurbanism and quality of life.
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