For Sale in Chile: A Modern Mediterranean Villa for $2.5 Million

A Four-Bedroom Garden Villa in Santiago, Chile

$2.52 MILLION (2.3 BILLION CHILEAN PESOS)

This four-bedroom contemporary house sits on a long, private greenway in La Dehesa, a suburban neighborhood in the Lo Barnechea commune of Santiago, Chile.

The 8,395-square-foot house was built in 2015 on a third of an acre ringed with gardens and specimen trees that offer privacy from neighboring homes.

The house is entered through a long hallway leading to an open-plan living room and dining area, separated by a large bookshelf partition that houses a gas-burning fireplace. The rooms overlook the gardens, one of which features a small waterfall. Across the hall is the primary bedroom suite, which has its own living area, two walk-in cedar closets, a double bathroom with heated floors, a spa shower and Jacuzzi, and egress to a private terrace with a small garden and pond.

The main level has natural cedar wide-plank floors, as well as polished concrete walls to provide a neutral backdrop for the current owners’ art collection.

Carolina Uribe-Echevarría, commercial chief and senior agent who represents the listing for the Santiago office of Sotheby’s International Realty, said the mingling of highly finessed concrete and wood materials gives the house a “modern and noble aesthetic” that is both “luminous and friendly.”

“All the materials ‘talk’ with the exterior facade, marble terraces and the garden,” she said.

Neutral Silestone countertops complement the concrete theme, which continues into the eat-in kitchen. Custom cabinetry offers ample storage and work areas with Smeg and Sub-Zero appliances. Adjacent to the kitchen, the dining area features built-in bookshelves and an entertainment system.

Floor-to-ceiling windows throughout provide abundant light and add a dimension extending to the outdoor terrace with its cantilevered pergola. The terrace has a dedicated dining area with a rotisserie, barbecue station and a bathroom, and is adjacent to the in-ground pool.

At the top of the stairs, a large living room with an integrated entertainment center anchors the second level, with three full-size bedrooms and bathrooms, and a separate wing with two bedrooms and a bath for staff. A smaller room with built-in bookcases serves as a study.

The finished basement features a recreation room and integrated home theater, fully equipped gym (equipment may be negotiated in a separate transaction), a half bathroom and wine cellar.

The affluent neighborhood of La Dehesa, about 18 miles northeast of downtown Santiago, Chile’s capital and largest city, is popular for its lifestyle, security and five top-ranked schools. Airport Comodoro Arturo Merino Benitez, about 30 minutes away, has a new terminal dedicated to international flights and is well-served by major carriers.

Market Overview

In its November Business Insights Report, the Central Bank of Chile noted that most real estate firms “expect the economy’s performance to deteriorate in the future,” leading to “a drop in activity for 2023.”

It’s already playing out across Chile’s financial sectors, marking an adjustment after “unusually high” gains during the past year, according to the report, with many firms projecting inflation to remain above normal levels over the next 12 months. The economic uncertainty, combined with insufficient demand for goods and services, should spur businesses to re-evaluate their investment strategies.

The pricing trend data graphed by the Central Bank of Chile reveals a volatile market for both houses and apartments since the onset of the pandemic. The annual home-price index fell nearly 40 percent from 2019 into 2020, then rebounded quickly in 2021, eclipsing 2019 levels. Quarterly graphs from the bank’s statistical database show decreases in the home price index across the board in the second quarter of 2022, particularly for houses, after price spikes for both home types in late 2021.

New home sales recorded by the central bank in the Greater Santiago market decreased from 8,753 transactions in the fourth quarter of 2020 to 6,007 in the fourth quarter of 2021, to just 4,416 in the first quarter of 2022. After rebounding in the second quarter with 5,537 total sales, the third quarter sagged to 5,262 sales, leading to the gloomy forecasts for 2023.

The overall new-house pricing index, estimated from the sale prices of homes in development units in Santiago, fell 2.1 percent from August to September, according to tradingeconomics.com, citing data from the Chilean Chamber of Construction.

Listings for luxury homes have been particularly slow to move. “We are seeing a decreasing demand for this kind of property,” said Felipe González, managing director of the Sotheby’s Santiago office, citing the combination of property prices tied to rising inflation rates and the costs of maintaining a large home and grounds. “People also have been diversifying their assets in a tightening credit market.”

A sampling of luxury houses in the general commune of Lo Barnechea include a 9,353-square foot, four-bedroom contemporary house on 0.57 acres for 3.41 billion Chilean pesos ($3.7 million), and an 11,625-square-foot, three-bedroom house on 0.85 acres listing for 4.32 billion pesos ($4.68 million). In the neighboring Vitacura commune, Sotheby’s is listing a 9,149-square-foot, five-bedroom house on 1.24 acres with extensive gardens for 2.66 billion pesos ($2.89 million).

Luxury apartments in Lo Barnechea include a newly constructed two-bedroom, two-bath duplex in a gated community for 459.2 million pesos ($498,000). In the La Dehesa neighborhood, a 4,000-square-foot, three-bedroom contemporary apartment with a 2,400-square-foot terrace lists for 1.7 billion pesos ($1.84 million).

Who Buys in Santiago

The Santiago real estate market is dominated by local buyers. Mr. González said that although it is the capital, Santiago is not an international city that attracts a global business or diplomatic community.

María José Borquez, owner of Borquez & Asociados, agreed that most transactions are domestic, with many city buyers seeking homes in the south of Chile (particularly Patagonia), where she has seen a 20 percent increase in queries over the past four years, and a similar trend in pricing. “There’s a lot of interest in different types of property and they have all increased value,” she said, but noted the current trend is “to be near a lake or a beach.”

“It’s similar to what happened in the United States or elsewhere: People are moving to have a lifestyle near nature because the pandemic showed they can do remote work,” she said. “They have been interested in Patagonia for the last 20 years and they continue to be interested in Patagonia.”

For those buying in the Santiago market, Mr. González said, families seeking home and garden space are homing in on affluent neighborhoods with good schools in the eastern part of the city, and those buying within the city limits are looking for apartments.

Buying Basics

Aside from buying on the border of Argentina, there are no restrictions on foreigners buying properties in Chile, said Cristián Mena, a partner in the Santiago law firm Mena Alessandri & Asociados.

Foreign buyers must acquire a tax ID, which is readily available, Mr. Mena said. After the buyer and seller settle on a price and delivery timeline, he said, “all other stipulations, which must be reflected on a public deed, are usually entrusted to an attorney.”

The purchase agreement is part of the public deed and witnessed by an notary, who also oversees escrow and deed registration.

Mr. Mena said that a straightforward transaction can take four to six weeks from contract to title transfer, and estimated allowing another two to four weeks for any pre-existing or pending mortgages to be resolved.

Websites

• Chile tourism: chile.travel

• Santiago Chamber of Commerce: ccs.cl

• Latin America Travel Association: lata.travel

Languages and Currency

Spanish; Chilean peso (1 peso = $0.0012)

Taxes and Fees

The annual property taxes for this listing are $14,000, which is payable all at once in March or in four installments. There is no value-added tax, and a stamp tax is calculated based on the amount of the mortgage, if any. The buyer and seller each pay 2 percent of the purchase price for broker commission. Mr. Mena estimated notary and registration fees to be 0.05 and 0.07 percent of the purchase price.

Contact

Carolina Uribe-Echevarría, Chile Sotheby’s International Realty; 011-569-9440-0297, www.sotheby’srealty.com

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