Chile’s housing market is booming
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Chile’s housing market conditions just keep pushing the real estate market’s large gains higher. As the market has been one of the best performing sectors in Chile over the last few years this is a continuing improvement for the region.
In many parts of Chile’s 7th region the average price of agricultural land was increasing at an average rate of 9% a year between 2003 and 2009. However since 2009 up until this year the rate has increased of over 12% a year.
The rural development land around Chile’s growing cities such as Puente Alto (Santiago), Machali (Rancagua), and Punta de Lobos (Pichilemu) have gone up by 30% and more in the last few years alone according to portalinmobiliario.com. Meanwhile in the last decade prices for apartments and single family homes in many of Santiago’s neighbourhoods have gone up by around 9% a year.
Some of Chile’s areas have watched prices boom much faster than the norm, although they’ve been moving all across the country.
The local market demand is what is currently driving the prices as Chileans with more disposable income search for their first home or apartment or decide to upgrade their current houses. However foreigners have already started buying in some areas.
In recent years foreigners have increasingly began entering the agricultural property market in Chile’s more central regions and it appears to be starting to rise more recently, suggesting the trend might just be getting started. Although foreigners have been involved in the market for touristic properties in the country’s southern regions for many years.
Both individual investors and institutional fund managers from abroad have started showing more interest in Chile which has a solid balance sheet and despite it’s distance from North America and Europe. Chile maintains an extremely low debt and has amassed a $21 billion USD “rainy day” stabilization/reserve fund that will help smooth out any bumps the global economy might see.
With vast mineral reserves, a relatively small population, very low unemployment, and technological and entrepreneurial sectors that are just starting to gain traction, it doesn’t look like this property boom here will be ending anytime soon.
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