Learn why real estate experts are calling Cali “the next Medellin”.
When TIME famously christened Medellin, Colombia as “the most dangerous city on earth” in 1988, who could have predicted it would transform into the celebrated tourist destination and real estate hotspot it is today?
Even after the peace agreement with the Revolutionary Armed Forces of Colombia (FARC) and the ceasefire with the National Liberation Army (In Spanish: Ejército de Liberación Nacional or ELN) made international headlines, it took years for much of the world to realize that Medellin had transformed into not only a safe spot, but an incredible place to travel, retire, live, and invest.
The lucky few investors who did recognize the potential in this Ciudad de Eterna Primavera or “City of Eternal Spring” were able to see massive returns. Every year since 2003, real estate prices have risen by an average of 7 percent per year thanks to booming tourism and a thriving economy. And in the chic, trendy barrio of El Poblado, some areas have seen double that amount of growth. It’s a trend we predict will continue for the next few years.
Though El Poblado and Medellin still represent excellent investment opportunities, they no longer the undiscovered gems they were 10 years ago. Which is why we’re turning our attention to Cali.
Often called “Medellin 10 years ago”, Cali, Colombia has got off to a slower start than other major Colombian cities when it comes to shaking off its dangerous reputation from days of yore. As a result, this sunny, sparkling clean, colorful city still sees massively undervalued properties even as tourism rates and rental demand skyrocket at some of the fastest rates in the country. “I think as things start to take off in Cali we might expect an even greater appreciation [than Medellin] for the next decade,” predicts Rich Holman, Founder and Director of Institutional and Residential Sales at Lifeafar.
Here are 8 reasons Cali is the best place to invest in real estate right now:
Tourism rates across Colombia continues to soar, up a whopping 300 percent from 2006. “Cali is still the place that receives the least international visitors and therefore has the most potential upside,” predicts Patrick Spanfelner, economist and Head of Operations at Lifeafar.
From 2013 to 2016 alone, Cali witnessed a 50 percent increase in tourism. One of the five most visited cities in Colombia, Cali is attracting an influx of travelers, digital nomads, retirees, and investors. According to Lifeafar databases, 27 percent of travelers and investors plan to visit Cali.
To accommodate the ever-increasing tourism demand, the government has invested millions in expanding the Cali airport to double the amount of international flights, making it possible to travel direct to Cali from New York, Miami, and Panama City.
Meanwhile, Hilton, Marriott, the Sheraton, and other luxury brands have erected properties, as Sonesta and Decameron announced plans to construct Cali hotels to be finished by 2018.
Shortage of quality accommodations.
For tourists, business travelers, and backpackers pouring into Cali, there are generally two options when in comes to accommodation:
First, there are upscale, ideally-situated hotels starting at $80 USD. Then, there are hostels that go for less than $40 per night, often in less-than-safe neighborhoods. There is very little in the way of rentals that are high-quality and well-positioned but affordable. This wide gap represents a tremendous opportunity for investors to fill the soaring demand.
Even as fellow Colombian cities like Medellin and Bogota began catching tourists’ eyes, Cali was slower to shed its dangerous reputation. In 2013, the country was ranked as the seventh most dangerous city in the world. “Things are changing now. Money is flowing in,” says Spanfelner, who witnessed the transformation first hand after moving to Cali himself five years ago.
Spanfelner notes that even though prices of new real estate in Cali are going up faster than any other major city in Colombia, “Cali still has a lot of upside ahead.” According to Spanfelner, prices of properties in desirable areas of Cali are still 50 to 100 percent less expensive than similar properties in Medellin and as much as 100 to 500 percent less expensive than those in Bogota and Cartagena. He gives a “conservative” estimate that Cali property values will continue to rise 5 to 8 percent over the next 10 years.
A lush, vibrant, modern city.
Revered as the salsa capital of the world, Cali is home to bumping night clubs, as well as world-class eateries, trendy cafes, and sleek shopping malls. The walkable city is shaded by trees in many areas and abounds with green parks and riverside trails. The water is drinkable and the internet is fast. Tree-shaded, trendy, and secure riverside barrios like El Peñon, San Antonio, Santa Teresita, Normandia, and Centenario remind us of Medellin’s El Poblado 10 years ago. Evidence of urban renewal is everywhere, from the new River Boulevard to hotel developments sprouting up around the city, says Spanfelner.
In addition to a growing expat scene, Cali is home to the renowned warm and friendly caleños. Cali locals are easy-going and welcoming, eager to ask you where you’re from and how you like their city. The city is celebrated for its beautiful women, whom the city claims to be the fairest in the world. English is spoken at many shops, restaurants, and businesses.
Situated 1,000 meters above sea level, Colombia’s third largest city sees balmy weather year-round with cool evenings thanks to mountain breezes from the Andes. Areas like El Peñon and San Antonio are kept cool by river breezes and lush trees. Throughout the year, the temperature generally ranges from 18 degrees Celsius (66 degrees Fahrenheit) and 29 degrees Celsius (85 degrees Fahrenheit).
A quick 90-minute drive to the Pacific ocean, Cali is the closest major city to the Port of Buenaventura, one of the most important ports of the Pacific. A primary commercial hub for import and export trade within the country, Cali is the headquarters for many multinational corporations like Johnson & Johnson and Alert Logic.
Cali’s proximity to nature makes it a bird-watcher’s paradise. It’s also about three hours away from the famous Coffee Triangle, the rolling, emerald green region in which Colombia’s coffee production occurs.
Flights to Bogota, Medellin, and Cartagena are around one hour in duration and can be purchased for less than $100 one-way. The city is also only a few hours away via direct flight from hubs like Miami, Panama City, and Lima.
Cost of living.
It’s not only the real estate that’s affordable in Cali. The cheapest major city in Colombia, Cali enjoys a high quality of life and a low cost of living. You can dine at gourmet restaurants, paint the town red until the wee hours of the night at world-famous salsa clubs, and then Uber home for a fraction of the price you’d pay at home, and even less than you’d pay in many other Latin American metropolises.
Thinking of investing in this up-and-coming salsa capital?
If you are contemplating real estate opportunities in Cali, fill out the form below to download the latest investment package and learn how you can become involved in Cali River Suites, a promising project with an average 9% ROI. Or get in touch with Lifeafar to learn about Cali and future opportunities.
Subscribe to our newsletter and stay up-to-date on new investment opportunities and residential properties for sale, exclusive investor travel packages and conferences, and special rental discounts.