Cartagena Real Estate Forecast for 2019 and Beyond

Cartagena

Learn what to expect from Colombia’s charming colonial beach town in 2019 and beyond

Dubbed a Touristic, Historical, and Cultural District by UNESCO in 1991, Cartagena de Indias – typically referred to as simply “Cartagena” – is among the most enchanting cities in Colombia. The historic city sits on Colombia’s Caribbean coast overlook an emerald bay speckled with coral islands.

Founded as a Spanish port in 1533 by conquistador Pedro Heredia, Cartagena is surrounded by high colonial walls that look out over the Caribbean. Its strategic location made the port of Cartagena a crucial link in commercial maritime routes and one of the most important ports in the Americas.

Today, the jewel of the Caribbean coast continues to be a major port for shipping containers and cruise lines. The romantic and colorful city is home to a population of nearly two million and draws hundreds of thousands of visitors every year.

With Cartagena emerging as a resort destination, its real estate market started taking off 20 years ago and hasn’t slowed down since. Considering investing in Colombia’s charming colonial beach town? Learn what to expect in our Cartagena real estate forecast for 2019 and beyond.

Tourism growth in Cartagena

Cartagena Tourism

Once burdened with a reputation for crime and drug violence, Colombia has shed its dark past and reinvented itself as an increasingly trendy international destination. Since 2006, tourism in Colombia has risen a staggering 300%, and the country was named one of the top destinations of 2018 by The New York Times.

Much of the tourism growth is centered in other major Colombian cities like Medellín and Cali, where dangerous reputations kept travelers away until the early 2000s. But Cartagena has long been a popular and safe tourist site, even when tourism in other parts of the country floundered.

Today, tourism rates in already popular Cartagena are soaring. Cartagena has always burned bright as the star of Colombia’s Caribbean tourism, and glowing press and enhanced nationwide security have only fueled the fire.

Recent travel data indicates an increasing interest in Cartagena travel. According to Kayak, Cartagena was the top trending destination for Canadians in 2018 with a 58% increase in travel searches year over year.

To accommodate growing demand, major airlines have added new direct flights to Cartagena. In 2018, Spirit established new flights from Orlando to Cartagena, while Avianca introduced a direct route between San Salvador and Cartagena. Today, Cartagena received more than 50 international flights from New York, Miami, Amsterdam, and Panama City, among others.

At the same time, a growing number of cruise lines have expanded their routes to include Cartagena. In 2019, Cartagena serves 30 cruise ship lines and will welcome ships from MSC Cruises, Princess Cruises, Carnival, and many more.

The port of Cartagena welcomes 97% of travelers who come to Colombia by sea. In addition, the city continues to attract travelers with new boutique hotels, such as the anticipated Delano Cartagena.

What can we expect for tourism in Cartagena in 2019 and beyond? Spurred by enhanced safety, positive press, increased air connectivity, and hotel expansion, tourism rates in Cartagena are forecasted to see double-digit growth in the coming years.

Real estate growth

Cartagena Real Estate

Cartagena’s real estate market started growing 20 years ago when investors began remodeling historic homes in Old Town, many into boutique hotels. During the recession in the late 2000s, real estate prices in Cartagena held their own even as prices for properties in the U.S. and Europe plummeted.  Now, Colonial and Republican-style homes in Old Town are some of the most expensive in the country, with decent properties rarely going below $1 million USD.

As housing prices in popular neighborhoods like Old Town and Getsemaní skyrocket, visitors are beginning to look to accomodation in up-and-coming neighborhoods like Manga. The safe, clean, and residential Manga barrio has remained largely overlooked by investors despite its proximity to Old Town and Getsemaní. Because Manga has managed to escape the notice of many investors and visitors, properties there are 50 to 60% cheaper than comparable homes in tourist zones.

As more visitors and locals escape inflated rates of accommodation in Old Town and Getsemaní, we expect real estate in budding barrios like Manga to rise steadily over the coming years.

Economic growth

In a country that enjoyed unprecedented economic growth over the last decade, Cartagena stands out with a robust economy that is expanding at one of the fastest rates in Colombia. The nation’s fifth largest city, Cartagena boasts the strongest economy on the nation’s Caribbean Coast. Over the past few years, Cartagena has received the greatest industrial investment out of any city in Colombia.

Looking ahead to 2019 and beyond, economic growth within Cartagena and across all of Colombia is forecasted to continue. GDP growth in all of Colombia is predicted to climb steadily thanks to factors like rising oil prices, stable private consumer consumption, and recovery of non-oil exports.

A quick note on currency exchange

USD vs COP 10 Year

Today, Cartagena – along with Medellín, Bogotá, and Cali – is seeing a unique combination of rising real estate prices but declining currency rates. As of March the 26th, 2019, the Colombian peso (COP) is trading at 3,132 to the United States dollar (USD) compared to 1,872.5 on this day eight years ago.

For the present-day investor armed with USD, this represents 67% greater buying power compared to investors eight years ago. As we move into 2019, even premium homes in Cartagena are a bargain compared to similar properties in the U.S. and Europe.

The bottom line

With sunny beaches, historic charm, and a colorful culture, Cartagena is poised to become a top destination for international travelers. As the Cartagena real estate market heats up, under-the-radar barrios like Mango present a rare opportunity for substantial returns to early investors.

To find out more about real estate opportunities in Cartagena, we invite you to connect with our office at Lifeafar.

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