Published on and written by Cyril Jarnias
For about a decade, Colombia has shifted from being an “emerging destination” to a true tourism heavyweight in Latin America. This rise not only transforms the country’s economy and image: it is profoundly reshaping the real estate market, from the historic center of Cartagena to the trendy neighborhoods of Medellín, and the modern towers of Bogotá.
Behind the paradisiacal image, mass tourism is a major driver of real estate appreciation, generating social tensions around access to land and housing.
When Tourism Becomes a Driver of the Real Estate Market
The rise of tourism in Colombia is spectacular. The country keeps breaking visitor records: over 6 million international visitors recently, an annual growth rate for the tourism sector estimated between 7% and 9%, and revenues that now exceed those of traditional pillars like coffee, flowers, or bananas. Tourism is now the top source of foreign currency outside the mining sector.
The value of the Colombian real estate market is estimated at over 2 trillion dollars.
In this context, tourist destinations play a locomotive role. Major cities – Bogotá, Medellín, Cartagena, Cali, Barranquilla, Santa Marta – concentrate the bulk of price increases and investment. The short-term rental boom, fueled by platforms like Airbnb or Booking, acts as an amplifier: the returns from these rentals can be 50% to 150% higher than those of a traditional long-term lease, which attracts capital en masse, both local and foreign.
The Economic Weight of Short-Term Rentals
Airbnb estimates its activity generates over 10 trillion Colombian pesos per year for the national economy, approximately 2.6 billion dollars, and supports over 200,000 jobs. More than 600 Colombian municipalities rely on this type of accommodation to supplement a still-limited hotel supply.
The number of active short-term tourist rental listings in France in 2023, compared to about 73,000 in 2021.
This rise in power can be summarized in the following table:
| National Short-Term Rental Indicator | Low Point 2021 | Peak 2023 | Trend |
|---|---|---|---|
| Number of active listings | 73,090 | 123,640 | Sharp increase |
| ADR (average daily rate) | 66 USD | 91 USD | Gradual increase |
| RevPAR (revenue per available listing) | 10 USD | 32 USD | x3.2 in 2 years |
| Maximum observed occupancy rate | 14% | 35% | Steady progression |
This growth doesn’t just fill booking calendars: it puts pressure on sale prices, steers new real estate projects towards being “tourist rental friendly”, and reshuffles the cards between traditional hotels and private hosts.
How Major Cities Are Transforming Under Tourist Pressure
To understand the impact of tourism on Colombian real estate, we must look city by city. Each illustrates a different facet of this phenomenon, between yield opportunities, soaring prices, and social tensions.
Medellín: Capital of Digital Nomads and Laboratory of Gentrification
Medellín has become the symbol of the “new Colombia”: a city of innovation, mild climate, improved safety, tech scene, coworking spaces on every corner. It is also one of the epicenters of tourism and real estate investment.
The neighborhoods of El Poblado and Laureles crystallize these changes. El Poblado, already affluent to begin with, is now one of the most expensive markets in the country, with prices per square meter commonly ranging from $1,500 to $2,500, or even more in premium sectors. Foreign demand is intense, driven by digital nomads and an influx of capital in dollars or euros benefiting from a peso depreciated by about 40% against the dollar since 2015.
In well-managed properties, the best short-term rentals show occupancy rates of 65% to 75%, with nightly rates from $55 to $100. Net yields often range between 6% and 10%, and can exceed this threshold for high-end products specifically designed for platforms like Airbnb.
In Laureles, a more residential and “authentic” neighborhood highly sought after by foreigners, the pressure on rents is even more visible. Between January and April 2023, some sectors saw rents jump by 81%. In El Poblado, the increase reached 33% over the same period. Over three years, sale prices in El Poblado are estimated to have increased by around 66%, boosted by this “Airbnb effect”.
This helps explain why Medellín is experiencing both a tourism boom – about 1.2 million foreign visitors in a recent year, with peaks of 136,000 monthly visitors in Comuna 13 alone – and strong housing tensions. The city suffers from an estimated deficit of over 50,000 housing units, while about 11% of the population lacks stable housing.
Cartagena: Luxury Tourism Ignites Real Estate
Cartagena is the other major showcase of the real estate transformation driven by tourism. The Caribbean city, a UNESCO World Heritage site, piles on superlatives: annual price increases of 10% to 12%, strong international demand, and spectacular valuations in the historic center.
In the Walled City (Ciudad Amurallada), property scarcity and unique heritage have led to price increases of 300% to 600% in a few years. Colonial houses, now valued between $1 and $10 million, are primarily converted into boutique hotels or luxury vacation rentals.
The neighborhoods of Bocagrande and Laguito, lined with modern seafront towers, have become a classic playground for tourist investors: a one-bedroom apartment near the beach goes for around $200,000, while large bay-facing units can exceed a million. Yields are double depending on whether you rent by the year or by the night: traditional leases often yield 5–6% gross, but short-term rentals regularly allow crossing the 12–15% threshold.
Simplified comparative table of major tourist cities:
| City | Flagship Tourist Neighborhoods | Typical Prices (1 bedroom) | Gross Short-Term Yields | Estimated Annual Appreciation |
|---|---|---|---|---|
| Medellín | El Poblado, Laureles | 75,000 – 250,000 USD | 12–15% on the best properties | 7–8% (up to 10–15% in El Poblado) |
| Cartagena | Historic Center, Bocagrande | 90,000 – 350,000 USD (excluding luxury) | 12–15% common | 10–12% (national record) |
| Bogotá | Chapinero, La Candelaria, Usaquén | 65,000 – 200,000 USD | 5–8% net on average | 6–7% |
Behind these flattering figures, however, lie heavy consequences for residents. In Cartagena’s historic center, regulations essentially only allow tourism-related uses (accommodation, restaurants, education), gradually reducing residential diversity. Many locals are leaving these now-unaffordable neighborhoods, while the commercial fabric transforms to serve visitors almost exclusively.
Bogotá: Stability, Business… and Platform Pressure
The capital offers a somewhat different face. Bogotá is not primarily a vacation city, but an economic and cultural hub, blending business tourism, urban stays, and long-term stays for expatriates.
The neighborhoods of Chapinero, La Candelaria, Usaquén, and Chicó are highly sought after by tourists and traveling executives. Real estate there typically has a price per square meter between $1,500 and $2,000, with annual appreciation of 6% to 7%. These sectors also offer some of the country’s best gross yields for long-term rentals, averaging around 8%.
In the short-term rental market, Bogotá stands out for strong regulation and a high level of formalization: almost all listings are reportedly declared. Data from analytics platforms show about 12,000 active listings, occupancy rates close to 56%, and an average annual revenue of around $6,000 for a typical unit.
Bogotá’s case illustrates how stricter regulation can coexist with a dynamic market: administrative constraints impose a higher level of professionalization, but also secure investors who agree to play by the rules.
The “Airbnb Effect”: Record Yields, Rising Rents, and Tourism Gentrification
The rise of short-term rental platforms has very concrete effects on the Colombian real estate market.
On one hand, the performance figures are staggering: announced net yields between 6% and 10% in the best locations, yields 50% to 150% higher than long-term rentals, occupancy rates near 70–80% in the most touristic areas, gross monthly revenues frequently exceeding $700 to $1,400 for a simple one-bedroom in El Poblado.
On the other hand, the massive shift of housing originally rented annually to short-term rentals depletes supply for residents, drives up rents, and accelerates gentrification and “tourism gentrification” phenomena.
From Gentrification to Tourism Gentrification
In Medellín, this phenomenon is particularly visible in Laureles, El Poblado, or even Comuna 13. The process is classic: arrival of wealthier demographics (tourists, expatriates, digital nomads), conversion of apartments to short-term rentals, arrival of businesses and services tailored for this international clientele, increase in real estate prices, and then gradual departure of more modest residents.
This movement, described as gentrification, takes a specific form when the main driver is tourism: it is then called tourism gentrification. The neighborhood gradually ceases to be primarily a living space for residents to become a backdrop for visitors. In Cartagena, the historic center is a textbook case: residential uses have faded in favor of hotels, bars, restaurants, and vacation rentals.
Gentrification and Tourism Gentrification
Rent figures confirm the scale of the shock for local households. While the average rent for a one-bedroom in a Colombian city center hovers around 1.4 million pesos (approximately $350), much higher values are observed in the most touristic cities: between 2 and 4 million pesos in Cartagena, between $400 and $700 for a one-bedroom in central Medellín, and $320–$500 in Bogotá.
Comparative table of estimated monthly rents (one bedroom, city center):
| City | Rent Range (COP) | Approx. Range in USD |
|---|---|---|
| Cali | 900,000 – 1,500,000 | 220 – 370 |
| Medellín | 1,100,000 – 3,000,000 | 270 – 730 |
| Bogotá | 1,100,000 – 3,500,000 | 270 – 857 |
| Cartagena | 2,000,000 – 4,000,000 | 490 – 978 |
For Colombian households, whose incomes are in pesos and who do not benefit from the “geographic arbitrage” of digital nomads paid in dollars or euros, this tension translates into decreased housing affordability, particularly in tourist areas. The anti-digital nomad signs seen in El Poblado reflect this growing unease.
A Housing Deficit Aggravated by Tourist Demand
At the national level, nearly 26–27% of households are estimated to be affected by a housing deficit, about 4.9 million households. For the first time, Colombia has more renters than homeowners: 7.3 million renting households versus 7.1 million homeowners.
Analysis of the pressures exerted by tourist rentals on the residential real estate market in attractive cities.
Every apartment converted to a tourist rental reduces by that much the number of homes available for permanent residents.
Tourist cities face both strong residential demand due to urbanization (80% of the population in cities) and increasing tourist pressure.
Supply is constrained by high construction costs and regulatory hurdles, amplifying market tension.
Digital Nomads: Tourism That Doesn’t Say Its Name
The official launch of the “V” type visa for digital nomads marked a turning point. This scheme, in effect since 2023, allows stays of up to two years in Colombia, provided proof of a monthly income at least three times the minimum wage (approximately $1,100 to $1,200) and adequate health insurance.
Medellín is the main beneficiary of this policy: an estimated 15,000 digital nomads live there permanently, with a monthly influx of several thousand arrivals. Their average stay length, around 28 days, places them halfway between tourist and resident.
For the real estate market, the impact is twofold:
Expatriates strongly influence the real estate market. For rentals, they seek safe, well-connected neighborhoods (El Poblado, Laureles, Envigado, Chapinero, Zona Rosa), prioritize furnished units with good internet via seasonal platforms, and their high rents drive prices upward. For purchases, some become investors, attracted by yields and capital gains, facilitated by investment visas accessible from around $100,000 to $120,000.
Again, this demographic reinforces both the market’s attractiveness and solvency as it fuels gentrification and exclusion dynamics, especially in trendy central neighborhoods.
A Legal Framework in Full Restructuring
Faced with the explosion of tourist rentals, the Colombian state has progressively built a regulatory arsenal, now in a phase of tightening.
RNT, TRA, SIRE: All-Out Formalization
At the heart of the system is the Registro Nacional de Turismo (RNT – National Tourism Registry). Any short-term accommodation activity must be registered there, including apartments rented through platforms. Driven by Law 2068 of 2020 and other texts (Law 1558 of 2012, Law 675 on horizontal property, Decree 1074 amended by Decree 1836 of 2021), the framework has been drastically strengthened:
– obligation for hosts to obtain an RNT number, update it annually, and communicate it to platforms;
– systematic registration of guests via the Tarjeta de Registro de Alojamiento (Accommodation Registration Card) in SIAT;
– registration of foreigners in the SIRE system managed by Migración Colombia;
– mandatory civil liability insurance subscription;
– payment of a tourism parafiscal contribution (2.5 per thousand of revenue).
In Medellín, more than half of accommodation providers (approximately 2,883) have an active RNT, while a significant portion (nearly 46%) have suspended or canceled their registration, often unable to keep up with the pace of requirements or remain profitable.
Platforms in the Crosshairs
A specific decree from the Ministry of Commerce, Industry, and Tourism (MinCIT) now directly targets platforms like Airbnb. The spirit of the text is clear: move from a declarative model to an ex-ante control model, where platforms become co-responsible for the legality of listings.
The main obligations include:
– semi-annual verification of each host’s RNT;
– confirmation of compliance with zoning rules and homeowners’ association regulations;
– detection of duplicate listings;
– real-time interconnection with the government database;
– submission of a compliance plan for foreign platforms.
Sanctions can be considerable: suspension of listings, fines of up to 2,000 times the legal monthly minimum wage – about 2.6 billion pesos, nearly $500,000 – and up to 5 years of suspension or cancellation of the RNT.
Digital actors, grouped within the Colombian Chamber of Information Technology (CCIT), warn of a risk of “digital blackout” if these requirements, sometimes deemed technically impossible, are applied without a transition period.
Local tourist tax imposed by the city of Cartagena on overnight stays.
Homeowners’ Associations: Local Under-Regulation, Internal Over-Regulation
Under the horizontal property regime (Law 675), condominium buildings have the power to outright prohibit rentals of less than 30 days, unless expressly mentioned in their bylaws. Many residential buildings, faced with nuisances and constant comings and goings related to tourist rentals, have opted for this prohibition.
Result: units whose bylaws explicitly permit short-term rentals trade at a significant premium, estimated between 10% and 20% compared to similar properties in more restrictive condominiums. The ability to rent short-term itself becomes a valuable asset.
Summary table of main costs and regulatory risks for a tourist rental investor:
| Item / Risk | Range / Estimated Impact |
|---|---|
| Annual compliance costs (per property) | 800 – 3,000 USD, > 5,000 USD for high-end |
| Weight of operating expenses | 30–45% of gross revenue |
| Fiscal and regulatory impact on profitability | -10 to -30% per year |
| Effect of a cap on rental nights | -20 to -50% of possible Airbnb revenue |
| Fines for lack of RNT / non-compliance with zoning | up to 2,000 SMMLV (≈ 500,000 USD) |
| RNT suspension / cancellation | up to 5 years |
This tightening officially aims for three objectives: combat informality, protect the neighborhood, and counter excesses related to sex tourism or exploitation of minors, some cases of which have made headlines in Medellín.
Tourism, Hotels, and Competition with Platforms
The rise of short-term rentals hasn’t just reshaped residential real estate: it has also reshuffled the cards in the hotel industry. The hotel association COTELCO reports a 3.2% decrease in the sector’s revenue in 2023, partly attributed to platform competition.
The hotel sector in Medellín is expanding rapidly with dozens of recent openings, over 40 projects announced over three years, and a capacity of about 45,000 beds. Major international chains (Hilton, Accor, Marriott, Four Seasons, NH, Wyndham) are investing heavily, attracted by favorable tax regimes: a 9% corporate tax rate for 10 to 20 years for new hotels in certain municipalities and partial VAT exemptions on materials.
This duality – growth of hotels and boom of private rentals – shapes a hybrid supply where each segment specializes:
– Hotels focus on MICE (business tourism and conferences), all-inclusive, very short stays, corporate clientele.
– Tourist rentals capture longer stays, families, groups, digital nomads, and travelers seeking a “home-away-from-home” experience.
For real estate investors, this competition also creates new opportunities: co-living, serviced residences, hybrid projects mixing apartments, workspaces, and hotel services, “build-to-rent” models oriented towards tourism, etc.
A Market Boosted by Foreign Investment
The international dimension is impossible to ignore. Foreign investment in Colombian real estate has jumped by around 340% since 2020. In total, Colombia recently attracted about $17.4 billion in FDI, with a growing share in non-energy sectors, including real estate, commerce, restaurants, and hotels.
Foreign buyers account for between 15% and 20% of overall national demand, with peaks of 35–40% in highly touristic markets like Cartagena, 25–30% in Medellín, and 10–15% in Bogotá. The United States, Canada, and several European countries provide the majority of these buyers.
The maximum price in dollars per square meter for a property in Buenos Aires, outside ultra-premium sectors.
Various investment visas (M-Investment around $100,000–$120,000), permanent residency from about $185,000, and very open ownership rules – no specific cap or restriction for foreigners – further enhance the country’s appeal as an investment and second-home destination, especially in tourist areas.
Sustainable Tourism, Ecotourism, and New Real Estate Territories
However, not all Colombian tourism is limited to the Caribbean coast and trendy neighborhoods of Medellín. The government has made sustainable tourism a priority, with a national sustainability policy adopted by decree and a series of certification tools (NTS technical standards, ONAC accreditation, sustainable destination labels).
Colombian regions such as the Pacific coast, the Coffee Axis, the Sierra Nevada de Santa Marta, the Amazon, and some post-conflict areas (like Meta, Caquetá, and Guainía) are encouraged as testing grounds for ecotourism and community-based tourism projects. Investments there are more modest, but the logic differs: it relies on the active participation of local communities, the enhancement of the natural environment, and limiting negative impacts.
For real estate, this opens another front, more discreet but real: ecolodges, small glamping structures, fincas hosting tourists, adventure or nature observation accommodations. These segments remain far from the volumes of Cartagena or Medellín, but can offer interesting yields (often between 6% and 8% gross in cities like Santa Marta or Pereira) and geographic diversification.
The major question is whether Colombia will manage to extend the “Medellín–Cartagena model” to these regions without reproducing the same mistakes of overtourism, pollution, or land speculation that are already pushing some residents, for example in villages like Salento, to leave their now-too-expensive lands.
Towards a Still-Elusive Balance Between Tourism and Housing Rights
The impact of tourism on the Colombian real estate market is ambivalent. On one hand, the benefits are obvious: asset appreciation, rental yields above regional standards, massive influx of foreign currency, modernization of the real estate stock, multiplication of service sector initiatives, and creation of hundreds of thousands of jobs.
On the other, warning signals are multiplying: rent spikes in certain neighborhoods, persistent housing deficits, social tensions around digital nomads, excesses of sex and drug tourism, regulatory overreach risking a sudden block of certain markets, and weakened housing access for a significant portion of households.
Tourism revenues could reach up to 17 billion dollars in the coming years.
For authorities and sector actors alike, the entire challenge of the coming years will be to transform this tourism boom into a sustainable driver of the real estate market, rather than a delayed social bomb. This will involve at least three main thrusts:
Three levers are essential: better-calibrated regulation to avoid both impunity for informal operators and a ‘digital blackout’; ambitious housing policies to produce affordable supply in cities where rents are pushed up by tourism; and real diversification of tourism models, favoring community-based, ecological, and small-scale projects in some regions over mass real estate speculation.
The Colombian real estate market remains, in many ways, one of the most attractive in Latin America for investors seeking yield and capital gains. But this attractiveness, largely driven by tourism, comes at a price: that of the tension between a globalizing economy and residents who, for their part, cannot change currency or neighborhood at the whim of trends.
How Colombia arbitrates between these conflicting interests will say much about the trajectory the country takes in the coming years: showcase of profitable and inclusive tourism… or a new textbook case of a real estate market swept away by the tourist wave to the detriment of its own citizens.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
