Is it the right time to enter the Colombia housing market?... Investors are always looking for new ways to invest their money. Construction has long provided a very good return on investment funds. In the United States there was a building boom for a number of years until the recession hit a few years ago.
Residential building has slowed to a crawl and there is an abundance of already constructed buildings on the market waiting for buyers. As a result of this, savvy investors are looking offshore to find lucrative opportunities to diversify their funds.
Owning property or owning shares in property has always been considered to be a solid investment strategy. In the U.S., many residential properties have lost value in the last few years. As a result, domestic real estate portfolios are not appreciating as expected. Looking for areas of the world to invest in, informed developers have discovered that Colombia is an up and coming player in the international real estate horizon.
Colombia housing industry has demonstrated robust growth and in 2012 has a Compound Annual Growth Rate (CAGR) of 12.8 percent. While many countries have reported a decline in housing market as a result of the global economic crisis, Colombia housing industry had a growth rate of 8.4 percent in 2009 and 1.9 percent in 2010. This growth rate is a direct result of a stimulus provided by the government into infrastructure development.
Large infrastructure investment has resulted in Colombia construction sector growth of 18.5 percent in 2009 and 1.9 percent in 2010. Since the government has reduced investments in order to reduce the country`s fiscal deficit, it is expected that housing industry and construction performance in Colombia will become largely dependent on private investments.
Estimates by Timetric indicate that the industry will demonstrate a 6.5 percent CAGR within a time frame of five years. This is the perfect time for investors to get into the Colombia construction market and take advantage of the predicted growth rate.
In some part, it has helped to stabilize a growing market. According to goverment data, global recession made consumer confidence decreased and the residential housing market had declined by 2.3 percent in 2010. However, as a result of credit easing measures by the government, Colombia housing market continued its steady growth during 2011.
There is also a growing tourism industry in Colombia and demands for new hotels continue to increase. Several cities in the country have been targeted for hotel investments. These include mainly coastal cities as Barranquilla, Santa Marta and Cartagena; and another intermediate cities like Bucaramanga and Villavicencio.
Another area of expected construction growth is hospitality and leisure markets and these markets are expected to be drivers of growth during this time.
Investors and developers of real estate realize the importance of finding a reliable local partner to help with local regulations and construction practices. Entering a foreign country to begin construction can be fraught with frustration and misunderstanding unless there is a mediator to ease the way.
Working with a 40 years experience construction company in Colombia, and still having to struggle with local bureaucracy is something that I never finish to learn. International construction firms have long come to appreciate the value of having close ties with local construction partners. Every country has its rules and regulations when it comes to the construction of buildings. Establishing local contacts means there is no need to fear bureaucratic interference and wasted money due to delays.
Investing in the Colombian construction industry while it is at its peak is a sound investment for those who are savvy in business. Please feel free to contact me as our construction company in Colombia is open to make strategic partnerships with serious companies and/or investors interested in entering in the Colombia housing market.
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