|Back to Back Issues Page|
Colombia Realty Gazette #01 - Economic slowdown and Colombia Real estate market
September 30, 2008
Your link to the real estate market in Colombia
Yes, you may forward this email to anyone you want!
If you don't have a subscription, and would like one,
just go at the end of my Homepage and make your suscription.
(If some of URL in the newsletter are not a link, or shows a "not such URL" error page, please copy-and-paste the complete URL into your Web browser).
Welcome to the first edition of The Colombia Realty Gazette. It's the only newsletter for the non Spanish speaking community with information about the Colombia Real Estate Market and all related issues specially for the international market.
Hi, I'm Mauricio Jaimes. Some of you know me for my website or have contacted me before in some way. Well, it has been quite a long work since I went live with my website in June 2007. We have had the oportunity to assist many of you in the process of finding a home in Colombia. We are living turbulent times and things change very fast. Nothing better at this moment than be informed about how things are evolving. That's why I am creating this informative newsletter to keep you updated with everything that happen in this beautiful country you are new. I hope you will enjoy this newsletter as I do writting it.
Lately I've had some interest in reading books about personal and spiritual growth and all those subjects of the so called “New Age”. Authors like Osho, "Papá Jaime" Jaramillo and Deppak Chopra (my favorites) are agree that the most negative incident or event you can think of, always will bring positives consequences. I bring up this thought, because it would seem that in the case of the Colombia real estate market, the news media, comments of ordinary people in the streets and the whole environment in general show some kind of paranoia that only leaves us look at the dark side of things.
Right now everybody is talking about global economic slowdown, recession in the U.S.; real estate crisis in Spain, and another series of events to which Colombia is not indifferent at all.
Well, our country after enjoying an economic boom over the past 4 years, in which the construction and real estate market contributed to a large extent, is beginning to show signs of slowing. But watch out!, I’m talking about slowdown not recession. It’s not the same to run slower than fall or crash!.
Many of the macro economic factors that drove growth of the housing market are beginning to show an slowdown. It is estimated that the country's growth for 2008 will be between 4% and 4.5%, not bad for a country like ours, but lower in almost half compare to 2007. Additionally, the Bank of the Republic in July / 2008 increased interest rates by 25 basis points. With this picture, many colleagues in the industry are starting to complain about their low sales, and some of my clients ask me if we are going to follow in the footsteps of Spain and the United States or whether this is a right time to buy a property
I really think thanks to my new mentors, that there is nothing better than everything what is happening right now for the real estate market in Colombia.
The increase in interest rates, rather than discourage investment in real estate, helps to control excessive indebtedness of consumers, and contributes to keep portfolios of long-term mortgage in healthy conditions. When interest rates are very low, people tend to use loans to buy real estate, prices begin to inflate, developers to build more projects, speculators start to do their job and in the end the fall is more noisy and painful.
An adjustment to market at the right time is healthy for everyone: For developers because they can continue offering projects according with market realities; for buyers because they have the certainty that the selling price reflects the true value of their investment; and for real estate agents because they will be able to continue working in a solid market without fearing those long intervals that use to come with the crises.
Responding to the concerns I have received from several people about whether or not is it now a good time to invest in real estate, I believe that even though the economic conditions will not as good as the previous years in the short term (1 to 2 years), the value increase will be above the average and stable in the long run. Cities such as Medellin and Bogota will remain attractive markets for buy and sale. In some middle cities the time of sale may be longer, but anyway with a good advisor on your side you may find interesting, attractive, safe and profitable opportunities. Read this and other articles (In spanish and english) at my blog http://tucasaencolombia.blogspot.com/
3. Colombia listing directory
We are building the Colombia Real Estate listing directory, but with a different focus for publishing. The article is initially in spanish and you can see it at Publicar-clasificados-online.html.
It will be available later in english. Here we have the latest properties listed:
A beautiful property in the Coffe region with a particular story
A house in the country side of Santa Marta that belongs to a retire Swedish guy
A land for investment in the west plain lands (llanos Orientales) with plenty of information about Why to invest in Villavicencio
I'll keep posting new properties for sale in coming issues of The Colombia Realty Gazette
4. Whats New on the site
The Colombia Real Estate ebook Guide and The Colombia Visa Guide
Colombia realtors network
We share the same philosophy which is to provide professional real estate services to the international visitor. Our first concern is to change the old perception of real estate profession in Colombia.
You can read more about how this network is working at colombia-realtors.html
5. Questions from our visitors
Q: What is the difference between document 4 and document 5 besides the fact that four allows you to sell up and take your money home tax free.?
A: The difference between both forms is that only one of them allows you to exercise foreign investors rights. With Form 4 you're saying that you're making a foreign Direct Investment (FDI), and that will allow you to exercise the following foreign exchange rights conferred thereto by the law:
· Remitting abroad proven net profits periodically generated by this investments. i.e. A monthly rent.
· Reinvesting the profits. i.e. improvements to the property
· Remitting abroad any amounts obtained from selling the investment in Colombia.i.e. when selling the property.
You have to keep in mind that foreign exchange rights are different from tax condition and this last one depends on each individual. A good accountant or tax attorney can help you deal with that.
Form 5 is for "Services,transfers, and other Concepts", and it filled out by default by intermediary banks (unless you report not to) to declare a simple transfer of funds, for example a payment of services from abroad.
|Back to Back Issues Page|