Chile is currently seeing a growing demand for residential property in the premium segment. “The positive forecast for economic growth is having a particularly strong impact on this upward trend,” said Jorge Mira, Head of Real Estate at Engel & Völkers in Chile. Prices at the top end of the market have risen by around 5 percent in the past 12 months. The highest property prices in the South American country are being reached in the holiday resort Zapallar and the capital Santiago de Chile. National buyers dominate the residential property market, accounting for some 90 percent of transactions. The majority of properties in Chile are acquired for private occupancy.
Zapallar: Attractive market for holiday properties
Chile’s most expensive residential area for houses is the town of Zapallar on the South Pacific. The picturesque coastal resort is around two-and-a-half hours’ drive from Santiago de Chile and has always been a sought-after second home market. The top price per square metre for freehold apartments here in the first half-year of 2017 was 92 UF (approx. 3,200 euros). The maximum asking price registered for villas during the same period was 56,500 UF (approx. 2 million euros). Real estate in Chile is listed in the unit of account known as Unidad de Fomento (UF) rather than the country’s currency, the Chilean peso. It is linked to the inflation index and ensures stable valuations when converted into pesos. Property buyers in Zapallar are primarily wealthy private individuals. They are most interested in villas directly by the beach or with sea views, with interiors upwards of 250 square metres.
Vitacura and El Golf: The prime locations in the capital
Some of the highest-priced premium locations in the country can be found in Santiago de Chile. One example here is Vitacura on the northeast outskirts of the city. The area is very popular with families due to its good schools and hospitals. It also enjoys convenient transport links, exclusive golf courses and a polo club. The top price per square metre for freehold apartments in the first half-year of 2017 reached 120 UF (approx. 4,200 euros). Villas with large gardens are the most desirable type of property among buyers in Vitacura though. The maximum asking price witnessed in the first half of the year for such a property was 37,000 UF (approx. 1.3 million euros).
Another prime location in the Chilean capital is El Golf. The residential and business district is also northeast of the city centre and very close to one of the most exclusive golf courses in the country. Young couples and affluent buyers are particularly active in El Golf. These buyer groups are looking for freehold apartments with interiors of between 120 and 600 square metres. The top price per square metre here in the first half-year of 2017 was 95 UF (approx. 3,300 euros). Villas were on the market in El Golf during the same period for a top price of 18,350 UF (approx. 640,000 euros).
Buyers from abroad: Interest in Chile high among Germans and US Americans
International clients make up around 10 percent of buyers overall in Chile. They originate from Germany and the USA in the majority of cases. “We are also seeing an increasing number of Chinese buyers,” said Jorge Mira. Many of these interested investors based abroad are drawn by Chile’s diverse countryside and are keen to acquire a second home. Top criteria here include a high level of privacy, a large land plot and panoramic views. Foreign buyers who relocate with their family to Santiago de Chile for professional reasons tend to prefer homes in gated communities close to international schools.
Outlook: Positive price development at the very top of the market
Engel & Völkers forecasts that the level of interest from foreign buyers in residential property in Chile is set to intensify in the future. One reason for this is that this country along the southwest coast of South America is becoming an increasingly popular holiday destination. “Regions set to profit from rising prices in the future include Pichilemu, Pucòn and Patagonia,” said Jorge Mira. The surfer hotspot Pichilemu in the west of Chile is one of the fastest-growing second home markets in the country. The town of Pucòn on the banks of Lake Villarrica is a desirable destination all year round thanks to its beautiful scenery and nearby ski resort. Patagonia in the south of Chile also boasts spectacular countryside with mountains, glaciers and fjords. “A positive price development can also be expected to continue for properties in premium locations like Zapallar, Vitacura and El Golf in 2018,” Jorge Mira added.