Buy Real Estate in the World’s Best Second Cities

◼ Pauline says: It was great to read your real estate index in last month’s issue of IL. You said one of your top 20 places to buy real estate in 2024 was Montpellier, France. My husband and I are interested in retiring in France. I was wondering if you could tell me more about Montpellier and why you rank it so highly.

◼ Ronan says: Thanks, Pauline. Yes, Montpellier, on France’s southern Mediterranean coast, came 10th out of my 20 best places to buy. Here’s why: I love to spend time in “second cities.” These aren’t the initial port of call for first-time visitors to a country but can offer just as much to see and do… without the crowds. They also tend to be a lot cheaper. Montpellier is among the most attractive and exciting second cities you can visit.

Montpellier’s nickname in French is the surdouée (the gifted one), and it’s deserving of it. The city gets 300 days of sunshine a year and offers visitors a pedestrian old town, full of winding lanes amid Renaissance-era mansions. You’ll find avant-garde architecture, art galleries, museums, and superb nightlife and dining. The city even has its own Arc de Triomphe.

Then there’s the beach. It takes just 20 minutes or so on public transport to leave the compact city center and have your toes in the sand.

Montpellier is one of France’s fastest-growing cities. In the early 1960s, it had a population of around 119,000. Today it’s around 300,000. The city’s airport has been adding new routes and a high-speed TGV train station, meaning you can get to Paris in three and a half hours. It’s a huge center of third-level education. And given it’s home to the oldest operating medical school in the world, it’s probably not surprising that biotech is big in Montpellier.

This market is by no means cheap. A few years ago, there was a window of opportunity to find an old and unloved property in the city center and renovate it to rent out or relist, but those plays are now mostly gone (and were likely profitable for anyone who acted on them). Today, for ordinary two-bed apartments in Montpellier, you’re typically looking at a price of at least €250,000 ($270,000). Within the city center, historic apartments go for €500,000 ($540,000) or more.

But my impression is that Montpellier’s status will continue to rise. This is a cosmopolitan city with a lot to offer. There’s still space for tourism growth. And a thriving startup scene, along with a young, well-educated population, gives it a strong economic underpinning.

Combine that with 300 days of Mediterranean sunshine… some stunning white sand dune beaches nearby… the enviable, easygoing lifestyle… and you have a recipe for a great place to live and long-term strength in the real estate market.

◼ Greg says: In December’s issue of International Living magazine you ranked Medellín in Colombia as a great place to buy real estate. Are you kidding? Isn’t it a dangerous place?

◼ Ronan says: It was once a very dangerous place. Those days are far behind it now. I first visited in 2011, when expats were only just discovering the city. The drug cartel of Pablo Escobar was gone and this city was in the midst of a major transformation. Since then, it’s completely changed and been widely discovered. In terms of real estate, though, the shadow of the city’s past still lingers to a degree in its undervalued real estate market.

Medellín is one of the leafiest, greenest cities you’ll ever visit. It’s in a lush valley, 5000 feet above sea level and surrounded by verdant mountains. Known as “The City of Eternal Spring,” it’s a place where the weather is just about perfect year-round. Stroll down the city streets, and you’ll come across towering palm trees, inner-city rivers, and even frothy waterfalls.

And now it’s becoming one of the hippest cities, too. Chic cafés, theaters, museums, botanical parks, and open-air graffiti and mural galleries… It’s no surprise that Medellín comes out on top in many worldwide rankings of best places in the world to visit, retire, and even conduct medical tourism.

For years, Medellín has been a hot spot for digital nomads… folks who can work from streetside cafes while enjoying the stunning mountain backdrops. But since the pandemic, more remote workers have been coming than ever before. Increasingly, these are folks with money who rent by the month and will happily drop $1,500 for a one-bed condo.

While this trend has been taking hold in Medellín for years, the local real estate market hasn’t reacted. You can still own two-bedroom condos in prime locations from $100,000… or a three-bedroom penthouse for just over $200,000.

But here’s the thing: Despite the relative affordability of real estate in Medellín, there’s a limited supply of high-quality, well-managed condos for this new and growing group of wealthy renters. And as Medellín grows and its profile continues to rise, it runs into another major problem. Surrounded by mountains, it lacks developable land.

These factors point to a multi-decade run ahead for high-end real estate in Medellín.

My team and I are working on a report about real estate opportunities in Medellín for members of Real Estate Trend Alert (RETA). Buy the right real estate in the right place in town, and you could do very well indeed.