Text made by: by Juan Moreno
Given the excessive growth of rental fees in sectors such as El Poblado and Laureles, due to the high demand for rental housing, which according to sources consulted, have risen to 20%. The fear is that living in the center, which has traditionally been cheaper, will become more expensive and start to be part of that kind of real estate bubble that the city is experiencing.
According to figures from the Medellín Mayor’s Office, there are 886,293 homes established in the city, 30,676 of them located in the 17 neighborhoods of Comuna 10, La Candelaria. 85,783 people live in these residences, that is, there are 2.8 inhabitants for each household (not counting rentals, occupied as of 2020 as a result of Venezuelan migration and the pandemic). 48% of these 30,000 homes are rented while 41% are owned. A lower percentage is marked by the homes that are being paid to a financial corporation (5%), those that are in usufruct (5%) and those actually occupied (1%).
Could the bubble in the center inflate?
At the beginning of this year, an excessive increase in the price of housing began to be noticed in Medellín, especially in rentals and especially in middle and upper class sectors such as communes 14 (El Poblado) and 11 (Laureles – Estadio ). The factors behind these increases range from the contraction in the sale of new homes, the scarcity of new projects and the increase in construction costs, to speculation in the rental of houses and apartments due to the devaluation of the peso. “Tourists or the so-called digital nomads, who come to spend periods of several weeks and even months in the city, arrive with their powerful dollars of almost five thousand pesos to rent apartments on platforms such as Airbnb, and since everything seems so cheap to them, You can request up to five million a month for a 60-square-meter studio apartment without any problem”, says a source consulted and who has several apartments on Airbnb.
“So far this year we have found that, of the total housing on offer in downtown Medellín, 29% is available for rent and the remaining 71% is available for sale.”
This phenomenon has made it difficult for users from the city to find rental housing in these areas, who find themselves with unaffordable rates, which has motivated them to prefer to search in places close to El Poblado, but which are already part of from commune 10, like San Diego and Las Palmas.
But, have prices increased in the center? Federico Estrada García, Manager of La Lonja de Propiedad Raíz de Medellín y Antioquia, says that “We found that in the center of Medellín, so far this year, the supply of housing for sale has had an inventory growth of 27%. Meanwhile, for the rental market the case is the opposite, we have seen a contraction of 21% in the supply of rental housing, the foregoing, due to the lower construction of housing in the center, taking into account that, of this, among 18 to 23% of the houses that are built are for rent.
It should be noted that, in the center, there is a wide range of rooms for rent. Apart from tenements, where Comuna 10 is the leader in this modality, there are rooms that are rented to employees or students, especially in spacious apartments where a single person or a small family lives. “I live alone in a 200-square-meter apartment, so I made two of the rooms independent so that they had their own sanitary services and I rented them to a couple of well-known and referenced people at a reasonable price that does not exceed 500,000 pesos per month, services and internet included”, says Diego Ramírez, owner of an apartment in the vicinity of Parque de Bolívar.
Asked if there has been an abnormal growth in the supply and demand for the sale or rental of residences in the center, Federico Estrada comments that there has not been an appreciable difference, and regarding the increase in fees, he says: “During the beginning In 2023 we have seen growth in housing rental fees by an average of 19%, which corresponds to increases in rental fees for properties that were vacant in 2022, were occupied, and this year were again vacant. In general, these increases in royalties are in line with the entire inflationary process that our country has experienced since last year and that has implied the price increase of practically all the goods and services offered in our country”.
This being the case, in the center of Medellín the excessive increase that is being seen in the rental offers for housing in El Poblado and Laureles is not yet noticeable, but if the lack of available units continues, the surrounding areas, especially El Populated areas, such as San Diego and Las Palmas, could suffer this phenomenon in the medium term due to the destination of this type of residences, which are not only for long-term stays, but for months, weeks and even days, as is done in Airbnb-like platforms.
“Throughout the year we have found that, of the total housing on offer in downtown Medellín, 29% is available for rent and the remaining 71% is available for sale. Five years ago the proportion was quite different: 66% corresponded to rental housing and the remaining percentage was available for sale. However, as we indicated previously, the lower culmination of housing that we have registered in the last three years has caused these proportions to invert so noticeably”, concludes Estrada García.
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