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Cheap, Chic and Chile

Chile does not currently feature prominently on the global property investment radar. However, this relatively small South American country with its combination of low living costs, high quality of living and political stability has an increasingly stronger signal.

Chile is fast gaining popularity among foreign retirees, particularly Americans who are attracted to good value property prices and the low cost of living. Chile Property investment has not been immune to the global slowdown and prices in some areas have fallen by up to 40%, but low interest rates and housing initiatives mean the property market has not suffered as much as in other countries.

Prices start at around US$100,000 for an apartment in the capital, Santiago de Chile or in the Pacific resort, Viña del Mar. The resort's Mediterranean feel has led some to liken it to Saint Tropez, but without the prices. Chilean land is relatively cheap and unlike property, land prices have remained more or less stable. Add to this the cheap cost of construction in Chile and investment in land for a self-build property becomes very attractive.

When it comes to cost of living, Chile offers cheap day-to-day costs. In the recently released Mercer 2009 Cost of Living Index, Santiago is ranked as the world's 15th cheapest city. Unsurprisingly, the capital is very popular with foreign executives, many of whom go on to make property investment in Chile's largest city.

Like its much bigger near-neighbour Brazil, Chile currently features as one of the world's stronger economies. GDP growth was a very positive 3.2% last year with a decrease forecast for this year (The Economist predicts -1%) and recovery predicted for 2010 (+2.2%).

Chile's bid to attract foreign investment has had substantial success. The World Economic Forum (WEF) 2009 Global Enabling Trade Report ranked Chile in 19th position out of a total of 121 countries and ahead of major industrial powers such as China, Italy and Japan. This ranking is a major improvement for Chile, which featured in 27th position in the previous WEF Report (2008).

Chile also offers stability. Despite having emerged from a military dictatorship just 20 years ago, Chile is now a stable democracy, a considerable advantage in a continent where few countries can boast strong parliamentary systems. Along with Uruguay and Brazil investment, Chile enjoys stable politics, which is much appreciated by foreigners making property investment. Chile is generally considered a safer bet than Argentina and Panama, for example.

And for variety of scenery, Chile also has plenty to offer from endless sandy beaches to spectacular icebergs via salt deserts. Chile's southern hemisphere location and its stunning Andes mountains means the ski season has just started. Keen skiers can enjoy the numerous Andean resorts from June to October. Recent US$20 million investment in ski and hotel infrastructure improvements and good snow falls lead experts to believe this year will see record visitor numbers on the Chilean slopes.

With cheap but chic resorts, a buoyant economy, value-for-money property and a stable government, Chile is set to become a permanent green light on the property investment radar.

 

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