How Bogotá′s real estate skyline will transform in the coming years

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This time we are happy to introduce Jonathan Castro, a Colombian-American real estate agent based in Bogotá. Jonathan will give us his view about the real estate market in Bogotá and will talk about trends in Colombia.

HalloCasa: "Good evening Jonathan. Thank you very much for taking your time and talk with HalloCasa about the Colombian real estate market. Before digging into the topic itself, could you quickly introduce yourself and give us an overview of your background?”

Jonathan Castro: “Thank you very much for the invitation. I am happy to give potential investors an overview about the real estate market in Bogotá. Introducing myself, I was born in Florida, USA, where I studied Psychology at the Miami Dade College. In fact, I lived in Miami for about 15 years. During the last years I was very active in marketing, high end retail, and real estate investments and could gain a broad experience in those fields. The fact that I was in Miami when the real estate boom occurred and when the bubble burst gave me first-hand experience. This was an impressive situation which I will never forget, especially since Florida was hit tremendously.”

HalloCasa: “Great, let us directly stay with that topic. How was that when the bubble crashed?"

Jonathan Castro: “Oh that was horrible, especially in Florida! Literally, most of the citizens which belonged to the middle class and lower-middle class went bankrupt. And if they did not, their credit rating went down the drain. Personally, I experienced it first-hand. I lived with my parents. The value of our half-a-million dollar home with bay view and direct ocean access crashed. Within days, the market price decreased to the original price we had bought it from 3 years before at $200,000 USD. And if that was not enough, we had almost sold it a few days before the bubble burst, however, the deal had not been realized. That was definitely a lesson to be learned!"

HalloCasa: “Ok, that sounds like a huge impact. And then, you left Miami and went to Colombia. Why did you go back to Bogotá?"

Jonathan Castro: “That′s a good question. My parents are originally Colombian and they decided to move back to Colombia while I continued my journey in Europe to seek new frontiers and experiences. Less than a year after that I moved back to Bogotá to enjoy being close to my family again. Apart from that, I also saw many great professional opportunities in Colombia. So, I decided to start my own real estate agency here in Bogotá. The possibility to apply my combined knowledge in a market which is innovating and growing rapidly triggered my interest pretty much. In fact, my expectations were met very quickly after moving back. For example, being multilingual and of Colombian ancestry opened me many doors."

HalloCasa: “So, you know both the U.S. American and the Colombian real estate markets. With respect to that, what is the biggest difference between the USA and Colombia and between Bogotá and Miami, in particular?"

Jonathan Castro: “The biggest difference is that in Colombia the real estate business is right now starting to become organized and institutionalized. Until recently, the real estate market was not accredited by legal regulations. Now, Bogota′s town halls and “Lonjas”, which are the educational parameters regulated by the state, are working on applying the MLS system which will connect both North American and South American markets making it very easy to purchase overseas. With respect to similarities, both Miami and Bogotá share a strong investor base. Even though it does not seem obvious, investors′ interests are pretty much alike. Both are looking for attractive fast-growing opportunities with high returns on investments in order to explore and invest in upcoming metropolitan cities.”

HalloCasa: “Ok, so what are, in your opinion, the biggest reasons why investors should buy real estate in Colombia?"

Jonathan Castro: “In my opinion, it is a very good moment to invest in Colombia. There are two reasons for that. First, property values are steadily increasing nationwide and there are still a lot of untapped opportunities. Secondly, Colombian real estate is still very affordable compared to other countries in Latin America which, in the near future, might become the very opposite. Also keep in mind Colombia holds a large portion of the clean water and fertile soil left on the planet and a very impressive bio diversity of animals, food, and nature, a true treasure that we must protect in an innovate way.”

HalloCasa: “What formal obstacles must a foreign buyer fear?"

Jonathan Castro: “The biggest formal obstacle I see is the language barrier. Investors might have difficulties to understand the buying process properly and might therefore be afraid to invest. Apart from that, it is still quite a hassle to transfer money to Colombia and bank requirements are higher than in other Latin American countries, such as Panama, for example. This is mainly due to Colombia′s drug history and the fear of money laundry. But with the right help and once a trustworthy relationship between the investor and the broker has been established, it is less difficult as it might seem in the very beginning. Another obstacle is the lack of transparency. International investors have basically no access to the Colombian real estate market and don′t know which broker is trustworthy and acts professionally. Therefore, I always recommend to only work with people who have been referred to you by someone that knows that person personally.”

HalloCasa: “Ok, talking about Bogotá in particular, where do you see development needs for Bogota?"

Jonathan Castro: “Bogotá has a major development need in public transportation and better access roads since more and more people come to the capital for better opportunities. For example, Bogotá has a bus network which is called “Transmilenio”. It is based on exclusive lanes for particular buses. The idea of the system is a good one, however, it is not enough to facilitate transportation in a town of 9 million inhabitants. More buses and routes are necessary. That′s also one reason why the city is planning to start a metro system which is, in combination with more “Transmilenio” routes, much needed. Apart from that, streets need to be improved and high quality standards for the construction methods need to be implemented so that follow-up improvements do not need to be conducted.”

HalloCasa: “How do you see Bogotá transform in the coming years?"

Jonathan Castro: “I see Bogotá transforming and growing upwards very rapidly.

We are starting to see that already. Bogotá will look like Santiago de Chile in a few years and that's very exciting, since there are still many projects to be done, not to mention the outskirts of the capital that are still untouched and very affordable. Just to give you some examples that are making headlines worldwide:

1. One of the new mega projects is called “Torres Atrio”, located on Calle 26 with Carrera Boyacá (near the airport). Its construction began in January 2015 and it will be one of the first skyscrapers in Bogotá with more than 70 floors and an altitude of 270 meters. It has been designed by the 2007 Pritzker winner, Sir Richard Rogers, who is heading the company “Chaid Neme Cia”. The director of this project is Simon Smithson, who has also participated in other projects and urban planifications in Berlin, New York, and Paris. The project includes a hotel, offices, and residential apartments and will consist of two towers with more than 70 floors, 250,000 square meters which should be finished by the end of 2016 (Source).
2. Another mega project which will also contribute to the new center of Bogotá is called “Entre Calles”. It is said that it will be the tallest building in Colombia and in Latin America with 95 floors and 457 meters in altitude, higher than the Empire State Building in New York. It would be located on Carrera 7 with Calle 19. The planification, however, has not been finished yet (Source).
3. Finally, there is the first actual skyscraper in Bogotá which is already halfway finished, the “BD Bacata”. Being the first skyscraper in Bogotá, it has set some boundaries for the next to come. This tower will consist of 67 floors and 240 meters in altitude. It will consist of offices, a luxury hotel, apartments, and a commercial area in the bottom floors. The interesting part of the project is the way it’s being constructed with environmentally friendly materials. Also, all windows are designed to maximize natural illumination hoping to reduce the usage of electricity by 30%. Natural ventilation designs are implemented to reduce the electrical costs even further. It’s also one of the first buildings to have sustainable systems of water reutilization using stored rain waters and a waste management program. All construction materials are also treated to prevent atmospheric contamination and health related problems (Source)."

HalloCasa: “That sounds like a lot going on in Bogotá, transforming the city massively. Switching to risks, where do you see the greatest ones in the market?"

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