Cartagena has long been Colombia’s Caribbean pearl, boasting incredible history, architecture, food, and nearby tropical getaways. It should come as little surprise that Cartagena is the country’s most popular coastal city and number 2 for international tourism (contending closely with Medellin). In fact, according to cartagena.gov last year in 2022, around 3,584,262 passengers arrived by air into the city. Beyond tourism, Cartagena is a very important industrial city home to the nation’s biggest port, which is the 4th biggest in Latin America.
What kind of picture does paint for the local real estate market though? What does the real estate market even offer today in 2023? Does the steady growth of foreign interest make Cartagena a good place to invest? Let’s take a dive and see.
Why We Believe in Cartagena (in a Nutshell)
- Cartagena is Colombia’s second/third most-visited city (competing closely with Medellin)
- The Walled City is steeped in history and has been impeccably preserved (UNESCO). It is a tourist magnet.
- Dependable services such as phone providers, electricity and high-speed internet.
- Fanstastic gastronomic offering. Maybe best in Colombia after Bogota.
- The Caribbean Ocean. Cartagena is far more affordable than other Caribbean destinations despite offering a very high quality of life.
- High construction standards
- Diversity within the real estate market: modern beachfront properties, historic buildings, walled city.
- A steady growth in demand for short-term rentals.
- Home to Colombia’s biggest port and 4th biggest in Latin America.
- Year-round sunshine thanks to its proximity to the equator. Although peak season and dry season do coincide (December – April).
Of course, the real estate market in Cartagena does have its share of threats. In the last two years, we’ve seen Colombia elect a far-left president and that has scared off quite a few foreign investors. We’ve also seen quite a tumultuous performance of the USD against the local currency. After reaching an all-time high of $1/5,000 COP in October of 2022, it has sunk 20% against the Colombian peso and currently sits at $1/3900 COP.
Cartagena's Real Estate Benefits from The Historic Significance of The City
Cartagena is a historic gem. Architecturally, its the the most beautiful city in Colombia. Hands down. Its Old Town is both gorgeous and impeccably preserved, transporting you back in time to the Spanish rule of the 16th century. It’s like something straight out of Pirates of the Caribbean with gems to be discovered in each corner of its streets. The Walled City of Cartagena fully deserves its recognition as a UNESCO World Heritage Sight. Such a heritage brings major economic dividends back into the city in the form of tourism.
And although I love other places in Colombia such as Medellin and Bogotá, I found that Cartagena has, by far, the greatest cultural/historic offering in the country. Cartagena’s real estate, for this reason, is some of the most spectacular.
Amidst historical landmarks are restored colonial houses, boutiques & hotels, luxury apartments and of course – a rapidly growing supply of Airbnbs. Buying property in this part of town is buying a part of history. It’s all nestled within an excellently preserved and very colourful 16th-century colonial backset. Speaking of backset, the tropical Caribbean ocean surrounds the walled city.
The revival of Cartagena’s historic centre began in the early 2000s when wealthy expat Colombians began buying and restoring dilapidated colonial buildings. This process brought new life back into the Old Town, which was rapidly deteriorating. This resulted in a booming real estate market. In the 5 years from 2004 to 2009, prices rose as much as 300% to 600%.
Alongside Medellin and the Llanogrande area, the Walled City of Cartagena offers the most premier real estate market in the whole of Colombia.
Properties in this area are expensive. The Old Town is very small; you can walk from end to end in 15 minutes. New builds are very rare and most of the property on offer has already been restored. Talking figures, it is now hard to find properties in the Old Town for under $1 million. Smaller apartments are also hard to find and have usually been subdivided.
Living in the Old Town is a “dream” according to Paul Juan, owner of cartagenarealty.com. It is where the vast majority of first-timers in Cartagena want to go, want to stay. Walkable, ever trendier and more exclusive, replete with monuments and plazas, oozing with charm… It’s simply the place to be with everybody wanting in on the scarce real estate remaining.
Paul Juan adds that to get a renovated place within the Historic Centre, you’ll need to spend no less than $10 million COP per m2. With the current exchange, that would be around $2,500 USD per m2. Higher-end properties will set you back closer to $17 million COP per m2!
Gentrification in Cartagena
After the Walled City of Cartagena was declared a UNESCO world heritage sight in 1984, private investors swooped in to purchase properties, leading to rising real estate costs. However, a limited supply of real estate in the town center has expanded investor interest to surrounding areas. Chief among them is the now trendy neighbourhood of Getsemani. In the last 10-20 years the Getsemani neighbourhood went from being one of the poorest in the walled city to one of the hottest in demand.
If you didn’t notice already, I’m describing textbook gentrification. It’s a complicated topic but ultimately good news for the real estate market. Short-term rentals are in good demand throughout Getsemani. There are over 105 hotels in the neighbourhood and yet despite this impressive number, Airbnb is what predominates.
Worth adding is that Forbes magazine, an authority on business and investment news, wrote a piece on the Getsemani neighbourhood, recognizing its transformation from being a once seedy place to what it is now – one of the most happening and exciting in the city. Additionally, in 2018, Forbes listed Getsemani as one of the 12 coolest neighbourhoods in the world
Premium Beachfront Properties are Still Undervalued in Cartagena
Cartagena is blessed by its presence on the Caribbean Coast. Year-round sunshine, warmth, turquoise water and white sands. Mix that all with its close proximity to the US & Canada, and we can see why many Caribbean islands have become so expensive. This includes the Virgin Islands, Bahamas, Cayman Islands and the DR. Cartagena is truly one of the very few exceptions. You can get the Caribbean experience without the prices and that immediately makes Cartagena an exciting place to invest. Let us talk a little bit about Bocagrande…
Bocagrande is one of Cartagena’s most exclusive neighbourhoods and it’s the first you see of the city out from sea, thanks to its stacked skyline. The modern, imposing high rises of Bocagrande juxtapose with the age and history of the Walled City to its east. It may not possess the heritage and architecture of the old town next door, but it makes up for it with its long, palmy promenade, exclusive hotels and abundance of fancy restaurants. Bocagrande is the most luxurious neighbourhood of Cartagena and is home to the country’s second-most-expensive shopping mall.
If not staying in the old town, foreigners will usually opt to stay in Bocagrande as it has the most tourist facilities and high-end, beach-front accommodation.
It offers extreme value and luxury yet, is still significantly cheaper than other Caribbean destinations. The value for money is unbeatable.
You can easily find a 180m2, 3-bedroom apartment in Bocagrande, overlooking the ocean for under $180,000 USD. To better gauge current real estate pricing in this neighbourhood, have a look here.
Right now may be a good time to share that the Foreign Direct Investment ranking (2019-20) placed Cartagena among the top 25 cities with the greatest potential to receive foreign investment.
Cartagena's Coastal Location Makes it Very Attractive for Foreign Investment
Cartagena plays a key role in Colombia’s foreign investment. It is home to the country’s biggest port and the 4th most important in Latin America. It possesses a favourable geography, located at the heart of the American continent and just 265 miles from the Panamá Canal.
Not only is Cartagena a major port for imports/exports, but also for cruises. Cartagena’s cruise terminal services over 30 different cruise lines and receives 97% of all tourists arriving to Colombia by sea. The cruise industry is booming in Colombia. Last year (2022) was a record breaker by all means: Cartagena received 252,000 people through its terminal and generated around $40 million USD for the national economy.
Last but not least, tourism is a sector that has responded incredibly well to Colombia’s improved safety record in recent years. Even though Cartagena had mostly avoided the horrors that stained the country’s safety records, it was still adversely affected by worried travellers opting to vacate elsewhere. Well, tourism had been steadily increasing until 2020 when the Covid-19 pandemic had devastated the industry. The good news is that for the first quarter of 2023, non-residential travellers coming into the country were 49% higher than for the same time last year.
Colombia received 1.4 million non-resident travellers and of that, 179,264 were cruise travellers. This spells good news for Cartagena in particular.
The average accommodation occupancy rate also increased by 6.3% versus the same time last year. President Gustavo Petro is optimistic that Colombia can meet its goal of welcoming 12 million visitors by the end of his 4-year term in office.
Short-term Rentals are Doing Well in Cartagena
Cartagena is conforming to the national trend of growing short-term rental demand. While data is scarce for Cartagena, we know that since 2020, the offer of Airbnb in Medellin grew by 66%. In 2022, Airbnb in Medellin generated over $62 million USD, 78% more than in the year before.
This kind of explosive growth coincides with the increasing tourism in the country. Have in mind that Medellin has experienced more exponential growth than anywhere else in the country.
However, in Cartagena evidence of the app’s growth is axiomatic. Simply search for Airbnb in the Old City and you’ll be met with over 1,000 options. In Bocagrande, the results are even more intense with the entirety of the neighbourhood lit up with listings.
Airbnb itself published a ranking of the top cities in Colombia which are most attractive for digital nomads and of course, Cartagena dominated the list. The three categories were: cities most prepared, cities most hospitable and cities with highest foreign interest.
Conclusions
Cartagena has always been a holiday hotspot, even while tourism in the rest of the country was severely underdeveloped. This Caribbean pearl has somehow always been immune to the reputation of its neighbouring cities. Cartagena’s safety record, charming and world-class old town, beautiful beach-front properties and perpetual sunshine have kept the real estate market both diverse and in hot demand
What’s promising is that as tourism continues to steadily climb in Colombia, we can expect Cartagena to also continue growing as a place of foreign interest. It is a city that has experienced a revival since the 1980s thanks to a surge of investment within its historic city. The city now wants to share its strengths which extend beyond tourism. Cartagena is packed with industry and its port makes it a strategically significant city in the region. The real estate market’s steady growth does seem to be reflecting this reality.
Do you have any doubts, suggestions, or comments about this article? Would you like to know about the best opportunities in the Colombian real estate sector? Please fill out the contact form here, send me an email at david@medellinadvisors.com, or a WhatsApp message to: (+57) 317 5233469, and we can discuss it further with ease
