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What is the outlook for the real estate market in Cabo San Lucas?

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Authored by the expert who managed and guided the team behind the Mexico Property Pack

property investment Cabo San Lucas

Yes, the analysis of Cabo San Lucas' property market is included in our pack

The Cabo San Lucas real estate market in 2025 shows exceptional growth with luxury properties leading appreciation rates of up to 107% year-over-year. Foreign investment and tourism recovery drive strong demand across all property segments, from $571,000 condos in El Tezal to $16 million beachfront estates.

Average prices now range from $571,000 for value condos to $2.25 million for premium homes, with luxury villas commanding $3-16 million. The Pacific region leads growth at 13% annually, while emerging neighborhoods like El Tezal and Cabo Corridor offer the best value appreciation potential for investors.

If you want to go deeper, you can check our pack of documents related to the real estate market in Mexico, based on reliable facts and data, not opinions or rumors.

How this content was created 🔎📝

At The LatinVestor, we explore the Mexican real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Cabo San Lucas, Puerto Vallarta, and Playa del Carmen. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are the current average prices for different property types in Cabo San Lucas?

As of September 2025, Cabo San Lucas property prices vary significantly based on type and location.

Condominiums average $792,840 for higher-end resort-style units, with more affordable options in El Tezal starting at $571,000 and San José del Cabo condos averaging $729,000. These condos typically offer resort amenities and turn-key living solutions.

Single-family homes show a broader price range, with average selling prices between $1.13 million and $1.32 million for standard properties. Premium areas like the Pacific region command much higher prices, with average home sales reaching $2.25 million due to oceanfront locations and exclusive amenities.

Luxury villas represent the top tier of the market, starting around $1.5 million for Pedregal properties and extending up to $16 million or more for private beachfront estates. Ultra-luxury transactions in developments like Chileno Bay and Maravilla regularly surpass $10 million per sale.

It's something we develop in our Mexico property pack.

How have prices changed over the past 6 to 12 months, and what are experts projecting for the next year?

The Cabo San Lucas property market experienced dramatic appreciation over the past year, with average property prices rising approximately 25% year-over-year.

Luxury house prices showed the most spectacular growth, jumping as much as 107% in some premium zones. This exceptional appreciation reflects the scarcity of beachfront and oceanview properties combined with strong international demand. Condo prices appreciated at a more moderate but still robust 10%, while mid-range homes also gained about 10% in value.

For 2025-2026, real estate experts anticipate continued but more sustainable growth patterns. Well-located properties are expected to appreciate 3-7% annually, with high-end properties and emerging neighborhoods likely to outperform these averages. The moderation from recent explosive growth reflects market maturation and increased inventory in some segments.

Long-term forecasts for the next 3-5 years project moderate appreciation of 5-7% annually for prime and mid-market assets. This growth will be driven by ongoing infrastructure upgrades, sustained international demand, and the constrained supply of beachfront inventory.

What's the longer-term outlook for the market over the next 3 to 5 years?

The 3-5 year outlook for Cabo San Lucas real estate remains strongly positive, supported by fundamental market drivers and structural supply constraints.

Infrastructure improvements will continue driving market growth, including airport expansion projects, highway developments, and new luxury resort construction. These improvements enhance accessibility and attract more international visitors and investors to the region.

Beachfront property scarcity creates a natural appreciation floor, as strict regulations limit new oceanfront development. This constraint particularly benefits existing beachfront and ocean-view properties, which should see continued premium pricing and steady appreciation.

International demand, especially from North American buyers, shows no signs of weakening. Digital nomads, retirees, and luxury vacation home buyers continue choosing Cabo San Lucas for its proximity to the United States, favorable exchange rates, and high-quality lifestyle amenities.

Market experts project annual appreciation of 5-7% for well-positioned properties, with luxury and emerging neighborhoods potentially exceeding these averages. The combination of limited supply, strong demand, and ongoing infrastructure development supports this optimistic long-term outlook.

Which neighborhoods or zones are showing the strongest growth right now?

The Pacific Region leads Cabo San Lucas in current property appreciation, with average sale prices reaching $2.25 million and annual growth of 13%.

San José del Cabo demonstrates exceptional market momentum across multiple property types. Condo prices increased 10% while land values surged 54%, bringing the average home price to $1.38 million. This growth reflects the area's appeal for both luxury residential development and tourism infrastructure.

The Cabo Corridor shows explosive activity in land sales, with transaction volume up 177% and prices 192% higher than previous periods. This dramatic growth makes the Corridor highly popular for new luxury developments and resort projects.

El Tezal proves its resilience as an undervalued neighborhood with strong fundamentals. Condo prices rose 21% to an average of $571,000, offering 30-40% savings compared to beachfront alternatives while maintaining solid appreciation potential.

These neighborhoods benefit from different growth drivers: Pacific Region from luxury exclusivity, San José del Cabo from balanced development, Cabo Corridor from new construction demand, and El Tezal from value-conscious buyers seeking appreciation upside.

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Which areas are undervalued or expected to appreciate the most in the medium term?

El Tezal and the Cabo Corridor represent the best value opportunities in today's Cabo San Lucas market, offering significant savings below luxury hotspots while benefiting from infrastructure improvements and rising demand.

El Tezal properties currently trade at 30-40% discounts compared to beachfront alternatives, with condos averaging $571,000 versus $792,840 for resort-style units. This neighborhood may experience accelerated appreciation as amenities improve and accessibility increases through ongoing development projects.

The Cabo Corridor benefits from its position between Cabo San Lucas and San José del Cabo, with new infrastructure and resort developments enhancing its appeal. Land sales volume jumped 177% with prices rising 192%, indicating strong developer confidence and future growth potential.

East Cape areas show medium-term promise due to infrastructure improvements and road development projects. Select East Cape locations offer entry-level pricing while positioned to benefit from improved connectivity to main tourist and commercial centers.

These undervalued areas share common characteristics: below-market entry prices, ongoing infrastructure improvements, and positioning to benefit from spillover demand from saturated premium zones. Investors focusing on these areas may capture both current cash flow and future appreciation potential.

How do price trends differ between condos, single-family homes, and luxury villas?

Property Type Price Trend (2024-2025) Primary Demand Driver
Luxury Houses +56% to +107% Oceanfront scarcity, golf access, resort amenities
Condominiums +10% Resort amenities, turn-key convenience
Mid-range Homes +10% Affordability, rental income potential
Beachfront Villas Exceptional premium pricing Extreme scarcity, iconic ocean views
Land Parcels -16% to -24% (declining) Market shift toward finished properties
Resort Condos +15% to +25% Hospitality integration, rental programs
Golf Villas +40% to +60% Golf course access, lifestyle amenities

What's the current rental yield for short-term vacation rentals versus long-term leases in each area?

Short-term vacation rentals significantly outperform long-term leases across most Cabo San Lucas neighborhoods, generating 6-10% gross annual yields compared to 4-6% for traditional leasing.

Premium properties in top locations command exceptional short-term rates, with some achieving $10,000+ monthly during peak seasons. Peak-season occupancy rates range from 46-73% in well-positioned properties, with Downtown, Marina, Medano Beach, and Pedregal areas commanding the highest rates and occupancy levels.

Long-term leases provide more stable but lower returns at 4-6% annual yield. Six-month "snowbird" rentals offer a middle ground, fetching $2,000-4,000 monthly for desirable properties with less turnover and reduced management requirements compared to nightly rentals.

Rental market hotspots differ by strategy: short-term success concentrates in Medano Beach, Marina District, Downtown, and Pedregal for maximum rates and occupancy. Long-term rental stability performs better in El Tezal and Cabo Corridor, where lower entry prices support better yield ratios and stable tenant demand.

It's something we develop in our Mexico property pack.

How is the current inventory level compared to demand across different property types?

Cabo San Lucas shows tight inventory in premium zones despite high overall sales volume, with 77% of total dollar volume concentrated in properties over $1 million.

Luxury market inventory remains constrained, particularly for beachfront and ocean-view properties where strict development regulations limit new supply. This scarcity maintains upward pressure on prices in premium segments despite increased overall market activity.

Emerging areas offer greater inventory choices and selection, providing opportunities for buyers priced out of prime locations. Increased listings in 2025 haven't reduced prices in top-tier areas, but non-prime sellers may face more competitive pressure and longer marketing times.

Demand continues growing strongly, driven by US and Canadian buyers, digital nomads, retirees, and luxury vacation home purchasers. The combination of sustained demand and limited premium inventory supports continued price appreciation in the most desirable locations.

New construction activity focuses on luxury developments and resort-integrated properties, which may help balance supply in higher price segments over the medium term while maintaining scarcity in irreplaceable beachfront locations.

infographics rental yields citiesCabo San Lucas

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Mexico versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What are the main drivers influencing the market right now, such as tourism, foreign investment, or infrastructure projects?

Foreign investment leads market growth, with record levels of international buyers, particularly from North America, driving demand across all property segments.

Tourism recovery reached new heights, with visitor numbers exceeding pre-pandemic levels and generating sustained demand for vacation rentals and second homes. The proximity to major US markets and direct flight connectivity supports consistent tourist flow throughout the year.

Infrastructure projects significantly enhance market fundamentals, including airport expansion to accommodate larger aircraft and increased passenger volume, highway improvements reducing travel times, and new luxury resort developments adding amenities and attracting more visitors.

Currency advantages make Cabo San Lucas properties attractive to dollar-based buyers, as peso weakness provides purchasing power benefits for international investors. This exchange rate dynamic particularly benefits luxury property transactions denominated in US dollars.

Regulatory scarcity of beachfront and marina-front properties creates artificial supply constraints that support premium pricing. Strict environmental and development regulations limit new oceanfront construction, making existing coastal properties increasingly valuable over time.

If buying to live in, which areas offer the best quality of life for the budget you have in mind?

Pedregal offers the ultimate luxury living experience with safety, privacy, ocean views, and gated community amenities, though it requires premium budgets starting around $1.5 million for entry-level properties.

Medano Beach provides walkability, urban amenities, and swimmable beach access with a vibrant atmosphere, though it can be noisy and crowded during peak tourist seasons. Properties here offer good value for those prioritizing beach lifestyle and convenience.

El Tezal delivers authentic Mexican community feel with developing amenities at significantly lower costs, making it ideal for budget-conscious buyers seeking value and potential appreciation. The neighborhood offers 30-40% savings compared to beachfront alternatives.

Cabo Corridor suits families and those wanting new developments with modern infrastructure and resort-style amenities. New construction here provides contemporary living standards with access to golf courses and planned communities.

San José del Cabo appeals to buyers seeking a more tranquil, artistic atmosphere with upscale dining and cultural amenities, offering a sophisticated alternative to the busier Cabo San Lucas tourist areas.

If buying to rent out, where can you expect the highest occupancy and best returns?

Medano Beach, Marina District, and Downtown Cabo San Lucas generate the highest short-term rental occupancy rates and nightly rates, consistently achieving 6-10% annual gross yields.

These prime rental locations benefit from proximity to restaurants, nightlife, beaches, and tourist attractions. Properties here command premium nightly rates during peak seasons while maintaining strong occupancy during shoulder periods.

Pedregal properties attract luxury vacation renters willing to pay premium rates for privacy, security, and exclusive amenities. While occupancy may be lower than beachfront locations, higher nightly rates often result in comparable or superior total returns.

El Tezal and Cabo Corridor offer strong value propositions for rental investors, with lower acquisition costs supporting better yield ratios even at moderate rental rates. These areas perform particularly well for longer-term rentals and snowbird seasonal rentals.

Successful rental properties typically feature resort-style amenities, professional management, and strategic locations within walking distance of popular attractions. Properties with unique features like ocean views, pool access, or golf course proximity command premium rental rates and higher occupancy levels.

If buying to resell later, which property types and locations are likely to have the strongest resale value?

Pacific region properties and luxury segments in Palmilla, Querencia, Pedregal, and Cabo Corridor offer the strongest resale value potential due to their premium locations and limited supply.

Properties in the $2-5 million range attract the strongest international buyer demand, providing optimal liquidity for future resale. This price segment captures serious luxury buyers while remaining accessible to affluent international investors.

Premium ocean-front and golf-front communities maintain the strongest resale values due to their irreplaceable locations and exclusive amenities. These properties benefit from both scarcity value and consistent international demand.

Well-located condos and homes under $800,000 in emerging areas like El Tezal, Cabo Corridor, and East Cape offer strong value appreciation potential. Pre-construction units or new developments often provide 10-20% discounts with significant future growth potential.

It's something we develop in our Mexico property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

  1. Cabo San Lucas Price Forecasts
  2. Average Cost of Homes in Cabo San Lucas
  3. Cabo San Lucas Real Estate Market
  4. Home Prices in Cabo San Lucas
  5. Cabo San Lucas Real Estate Guide
  6. Top Los Cabos Neighborhoods for Real Estate Investment
  7. Maximizing Investment Returns in Los Cabos
  8. Los Cabos Real Estate Market Today
  9. Los Cabos Real Estate Market Report 2025
  10. Popular Neighborhoods in Los Cabos