This is the All Southern Chile and Patagonia top five hottest markets for 2008 for foreigners and Expats wishing to invest in Southern Chile and Patagonia. We take a tour through the trends we have found in 2007 to help you make a choice for buying in 2008 and beyond.

Much has changed this year, both in terms of what is avaible on the market and the number of people searching for real estate in Chile. The most notable change in the Southern real estate market is the steady trend away from Chile as just a vacation destination, towards Southern Chile as a place to retire and live. There is also another new trend with recent strength of the Peso against the dollar in terms of investors looking for a safe haven from shaky real estate markets in other parts of the World. I will also include here my own All Southern Chile editor's pick for 2008. It is an area often overlooked by most Chileans and foreigners wanting to buy real estate in the South of Chile.

The selection of these real estate markets as the best places to buy property for living and investing in Chile is based on variety of sources. The first source is our direct experience with property purchases by our clients that we have handled this year in these areas of Southern Chile. The second is the reports we receive through our contacts with sellers, real estate agents, notaries, registries, and other members of the communities in Southern Chile that include such things as what properties have gone on the market this year, how long has it stayed on the market, price appreciation and depreciation, and number of foreigners or Chileans that are buying in certain areas. The third source is the volume of email we receive with inquiries regarding broken down by area. The final source of information regarding the market is traffic to our site, page hits correlated with the sorts of search terms that brought people to our site, and other statistics. So, here is our conclusions as to where markets for real estate in Southern Chile and Patagonia is going in 2008 and in years to follow.

Chiloe Real Estate

Chiloe Island has been a mover this year for several reasons. Most importantly cheap unspoiled land. Chiloe was recently voted by a committee of national Geographic researchers as one of the most unspoiled islands in the World. In and around the Ancud area you can still find very cheap land in the 2 million to 6 million pesos per hectare price range, even for small subdivided lots with beach front. Chiloe has many small calm and well protected bays that can give you the wonders of being on the Pacific ocean, without feeling like you are ON the Pacific ocean. The Island of Chiloe has a nice balance of low development, with easy access to major cities like Puerto Montt. Transportation is excellent, and the food is even better.

Aysen and the greater Patagonia Real Estate

As properties have become more expensive, and have also started to shrink in size in the Northern portion of the Chilean Patagonia, buyers have tended to drift deeper south in the Patagonia in 2007. The areas around Aysen still have some of the larger tracks of land for sale, often in sizes of over 2,000 hectares. Prices also have not really been inflated yet, and it would be expected that over the next 5 to 10 years properties prices overall will look more like the ones you would find in the Futaleufu area now. Land in the Aysen area is still mostly owned by Chileans, with the influx of buyers being more geared towards large land purchases for investment speculation, environmental conservation, or tourism projects.

Futaleufu, Patagonia Real Estate

Futaleufu ( or just Futa ) is still doing it. We had thought with some of the recent news surrounding various Gold exploration in the area, the very hot and mostly foreign driven real estate market in Futaleufu would cool a bit. It did not seem to slow down the land rush to the area. In fact, there is a bit of a change going on in the community as foreigners are now buying for more than simple summer vacation property (North America's winter), but to live all year in Futa. The town has also developed a bit of a heartbeat in the winter. We expect this trend of Futaleufu becoming a destination for expats to retire in Chile to grow over the next 5 to 10 years, but we never expect it to ever be anything like Panama or Costa Rica (especially as far as the scorpions and malaria laden mosquitoes go). Futaleufu for the most part is still discouraging Chilean buyers from Santiago as almost a official town policy (the mayor's office told us this), in favor of foreigners that will preserve the environment and respect their local culture. This is about as Gringo friendly a community as you will find in Chile.

Property prices still range from about 1 million a hectare up to around 15 million a hectare for prime property directly on the Futaleufu or Espolon river. Typical price for a property between 10 hectares and up is around 1 million to 3 million pesos a hectare. Property prices for properties below 10 hectares, tend to range around 5 million to 10 million per hectare. For the long-term investment, there is still growth to be expected; however, for much of the area the top has been reached for the next 5 years or so. Do not expect wild price increases as was seen over the last 10 years.

Still, much depends on location. Properties close to the town of Futaleufu will obviously be more expensive, along with properties on the more famous rivers and lakes in the area. Get out to some of the more remote properties, and deals are to be had. Keep in mind anywhere in the Patagonia, getting to know the neighbors is critical to finding good deals and at least half the fun of buying and owning land in Southern Chile.

Strangely, property prices in town are still not that bad. Lots in the center of town run about 10 million to 30 million, depending on what sort of structure is on it.

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Puerto Varas Real Estate

Puerto Varas has always been a hot real estate market. Nice and steady, with ever increasing growth. There are four to five new hotels slated for construction in the area, and there is already a casino in Puerto Varas proper. This town is about 25 minutes by car to the big city of Puerto Montt. Get out around the lake to find deals. As you go East along the lake however towards the town of Ensenada, expect prices to go up. Move out around the Western side of the lake to find better deals. Lake frontage is hard to find these days, but lots with great views of the lakes and mountains on the Western side can still be found.

Pucon / Villarrica Real Estate

We are keeping Pucon on the list this year just barely. The real estate bubble seems to have burst for the most part, but there is always the cycle of seasonal purchases by Chileans from Santiago. The prices go up in the Summer, and then the properties tend to be dumped back on the market in the winter as people from Santiago loose interest in the property or can not afford to keep up the payments. If you are so inclined to look at the Pucon area, look in the winter time when tourism is down and there are lots of property on the market. Also, avoid the Santiago real estate agents selling property in Pucon. Buy local, and avoid the more scummy sharks pushing vacation / retirement properties in the Pucon area.

Where do we buy? All Southern Chile and Patagonia Editor's Pick

Most of the real estate markets above are hot areas that our clients have bought in this year, or have looked at buying this year. Obviously our readers and our clients want to know where we buy in Southern Chile personally. Well, we would buy all of southern Chile, if we could; but among other locations, we have bought some land in Futaleufu and we will buy some land in Chiloe this year. We have one place we would buy and in fact did buy property for ourselves this year that is not on the above list.

Just east of the City of Osorno is the little town of Inter Lagos ( between the lakes ). This area has been for the most part overlooked by all the real estate booms and busts in southern Chile by both foreigners and Chileans. It has for generations been a place for old money rich to vacation during the summers, but only in limited areas. A few miles one way or the other, and there is still incredible views, rivers, lakes, fly fishing and more. There are many hot springs and a ski resort also in the area around Inter Lagos.

Inter Lagos, Chile Real Estate: Location, location, location, location.

The town of Inter Lagos is the last major settlement before the Argentina boarder. Thus, a property in the area puts you about 2-4 hour drive from most Bariloche, Argentina ski resorts, 40 mins to the fast growing city of Osorno, and a couple hours to most of the major popular destinations in southern Chile. Even beter is if you are so inclined to drive to the Patagonia, this is where you cross in to Argentina to reach destinations like Futaluefu or Aysen by car. Futaluefu is approximately a 6 hour drive around through Argentina from Inter Lagos, or about that point where your eyes start to cross from driving. Best of all, land prices are still cheap and range from around 2 million pesos for 5 square meters to about 8 million a hectare. For being so centrally located on a major crossroad in the heart of Southern Chile, the prices are still very very good. We believe this is because people are all on their way somewhere else when they pass through it, and simply have not stopped to give it a good look.

Some closing thoughts on Real Estate in Southern Chile for 2008

We should note that any such report is inherently difficult to do with any sort of accuracy in Southern Chile as there is no sort of centralized source of statistics for real estate in Chile. We caution that this is our overall view of the trends, and is in many ways a generalizations. Take your time, start with what YOU like, and most of all get out and get to know the people, communities, and geography of Southern Chile and Patagonia.