One one the first questions most foreigners ask us here at Tycoon is “what is the cost of land per hectare (or acre) in Colombia?“. In this article, we’ll explore the answer to this question in more detail by giving examples of the cost of land per hectare in different regions within the country.
Colombia is often defined as a large-estate country, as land ownership is unevenly distributed. Some individuals own large land expanses, which are allocated to economic activities such as agriculture and livestock. In Colombia, the process of locating suitable land investment opportunities can be a big challenge (we wrote about the process here). However, if you can manage to successfully source high quality land in Colombia, your investment can pay off for your years to come.
With 70% of its territory being classified as rural, Colombia is mostly a rural country, which is relevant because factors such as location are key when determining a land lot’s value.
In Colombia, the value of both the land and real estate property is determined by variables such as the house or land lot’s socio-economic stratum, the property’s opportunity cost, and the rural or urban classification of the area. However, there may be other factors that can be a little more subjective and circumstantial.
In Colombia, the units of measurement for land are square meters and hectares. One hectare is equivalent to 10,000 square meters, which is also 2.47 acres. If you need help converting feet, meters or acres into hectares, you can do so by using any of our land investment calculators.
Price of lots in an urban area of Colombia
In the case of lots and properties located in urban areas, location is key to determine their price, as it will provide information about the socio-economic stratum, opportunity cost, and cadastral appraisal, which is the price valuation of the property as determined by the state, according to its regulations.
The opportunity cost refers to a property’s development possibilities or future projections. If large-scale development is expected to occur in its vicinity or the area is just starting to become urbanized, being among the first investors can really pay off.
In Colombia, organizations such as La Lonja Propiedad Raíz seek to establish unified criteria to provide more accurate information about the square-meter value of real estate in large cities such as Medellín and Bogotá. In large cities like these, lot values can vary wildly. For example, in an area like Medellín’s Boston neighborhood— a stratum 4 neighborhood—, the square meter cost can range between 2,500,000 to 2,800,000 Colombian pesos (roughly $690 to $770 USD), while in a sector like Belén Malibu— a stratum 5 neighborhood—, the square meter can vary between 4,200,000 to 4,800,000 pesos (roughly $1150 to $1300 USD).
Lot prices in rural areas in Colombia
On the other hand, for lots in rural areas in Colombia, prices will be more subject to certain externalities than urban lots, so the difference between the square meter price in urban and rural can be extreme. To continue with the previous example, a 100-square-meter lot in a good sector of Medellín, with a good opportunity cost, could cost approximately 200 million Colombian pesos (roughly $55,000 USD). In a rural area like La Dorada Caldas, a 200-square-meter lot can cost 10 million Colombian pesos ($2800).
Opportunity cost also plays a significant role in rural properties. Rural areas located next to urban centers are priced a lot higher than purely rural areas, as is the case of Santa Fe de Antioquia, which despite being rural, is also a tourist area because of its historical heritage. There, a land lot of about 2,000 square meters can be valued at around 190 million Colombian pesos (roughly $53,000 USD). In this example, while in La Dorada Caldas, the price per square meter is 50,000 Colombian pesos (roughly $13,75), in Santa Fe de Antioquia the price per square meter is 1 million Colombian pesos (roughly $274 USD). Of course, if you can find foreclosed land in these areas, the price will be even cheaper.
Other factors to consider when buying lots in Colombia
Beyond this high variation in land lot prices, undoubtedly, one of the decisive factors when buying a lot in Colombia is the reason for its purchase, which is tightly coupled to opportunity cost. For example, if you plan to purchase a lot for industrial use, but it is located in an area where industrial activities are not allowed, you would be paying a price for a location unsuitable for your plans. For this reason, before deciding on what a good price is for a specific property, it is recommended to review the POT of its municipality or department. The POT is the Land Management Plan (Plan de Ordenamiento Territorial, in Spanish,) a document that describes the permitted uses of the land according to its municipality.
It is also crucial to inquire about any important projects to be carried out nearby, as any developments in the vicinity of a lot can positively or negatively affect its current price and future valuation. Loss of property value will result in the buyer losing money. In more serious cases, if the state requires a land lot or area to develop a social interest or social welfare project, affected properties may be subject to expropriation and purchase by the state, which would also lead to you, the landowner, losing money.
If you’d like to own land in Colombia, be sure to get in contact with us today. We have land scouts on the ground searching for the best Colombian land deals. Not only do we help with sourcing the best land deals, but we also offer owner financing allowing you to pay a small down payment and then reasonable monthly payments. We’ll hold your hand through the entire land purchase process.