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Yes, the analysis of Cabo San Lucas' property market is included in our pack
Cabo San Lucas property prices have doubled in many premium areas over the past decade, with current average home prices reaching $727,000 as of 2025. The market is driven by explosive population growth of 14-16% annually, foreign investment demand, and limited coastal inventory.
Property appreciation rates are forecast at 3-7% annually through 2026, with beachfront properties commanding 30-40% premiums over inland alternatives. Major infrastructure projects and sustained tourism growth of 5-7% yearly support strong fundamentals for the next decade.
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.
Cabo San Lucas residential property prices have surged over 100% in luxury segments during the past decade, reaching current averages of $727,000 for homes and $792,840 for condos.
Population growth of 14-16% annually, foreign buyer dominance, and limited coastal inventory drive continued price appreciation forecasts of 3-7% per year through 2026.
| Market Indicator | Current Status (2025) | Future Outlook (2025-2035) |
|---|---|---|
| Average Home Price | $727,000 | 3-7% annual appreciation |
| Price per Sq Ft | ~$385 USD | Steady growth with luxury outperforming |
| Population Growth | 14-16% annually | Projected 800,000 residents by 2040 |
| Tourism Growth | 5-7% annually | Sustained growth supporting demand |
| Foreign Buyers | Dominating high-end transactions | Continued strong US/Canadian demand |
| Rental Yields | 4-6% long-term, 6-10% short-term | Stable returns with tourism growth |
| New Construction | 1,200+ condos planned | Meeting demand without oversupply |
What have house prices in Cabo San Lucas done over the past 10 years?
Cabo San Lucas house prices have experienced dramatic appreciation over the past decade, with many premium areas more than doubling from 2015 levels.
The luxury market has seen particularly explosive growth, with average sales prices rising over 100% in just the past few years. As of September 2025, Q1 data showed a 70% jump in sales volume compared to late 2024, indicating sustained market momentum.
Current market averages as of 2025 show the overall average sale price for residential properties at approximately $727,000. Luxury houses now average around $1.32 million, while beachfront properties and villas trend even higher, often reaching $2-5 million or more in ultra-luxury zones like Chileno Bay.
This appreciation has been driven by a combination of explosive population growth, limited coastal inventory, and unprecedented foreign investment demand, particularly from American and Canadian buyers seeking luxury properties and vacation homes.
It's something we develop in our Mexico property pack.
What is the current average price per square foot for homes in Cabo San Lucas?
As of September 2025, the median price per square foot for houses in Cabo San Lucas is MXN 6,567 per square foot, which translates to approximately $385 USD per square foot at current exchange rates.
Apartments show slightly higher per-square-foot pricing at MXN 6,626 per square foot, reflecting the premium placed on turnkey condo living in the area.
These figures represent the broader market, but pricing varies significantly by location and property type. Beachfront and oceanfront properties command substantial premiums, often 30-40% higher than these median figures.
Luxury developments in areas like Chileno Bay, Palmilla, and oceanfront Corridor locations regularly exceed $500-800 per square foot, while inland areas like El Tezal offer more affordable options closer to the median pricing.
How have prices for beachfront properties compared to inland properties in recent years?
Beachfront properties in Cabo San Lucas command substantial premiums over inland alternatives, typically 30-40% higher than comparable inland listings.
Ultra-luxury beachfront homes in premium zones like Chileno Bay regularly sell for $2-5 million or more, with rare listings exceeding $10 million. Meanwhile, inland areas such as El Tezal and parts of the Cabo Corridor offer significant value and stronger appreciation potential at notably lower price points.
The price differential is clearly visible in average market data: inland condos average approximately $570,000, while oceanfront properties average above $1 million, with luxury beachfront areas commanding even higher premiums.
This gap has widened in recent years as limited coastal inventory meets growing international demand for oceanfront properties. Beachfront land scarcity, combined with strict coastal development regulations, continues to drive premium pricing for properties with direct ocean access.
What is the annual population growth rate in Cabo San Lucas?
Cabo San Lucas is experiencing one of the highest population growth rates in Mexico, running between 14-16% annually as of 2025.
The Los Cabos region has now eclipsed 350,000 residents, with projections suggesting the population could reach as high as 800,000 by 2040. This represents an unprecedented demographic shift for the area.
Historical data shows the explosive nature of this growth: from 2010-2020, the population grew 47%, far above the national trend. This rapid expansion has been driven by tourism industry job creation, infrastructure development, and the area's growing reputation as a destination for remote workers and retirees.
This population surge directly impacts housing demand, creating pressure on both rental and purchase markets. The combination of new residents, workers, and international buyers has fundamentally changed the supply-demand dynamics in the local real estate market.
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How many new housing units are expected to be built over the next five years?
Large-scale residential developments are currently underway in Cabo San Lucas, with thousands of new units planned for completion over the next five years.
As of September 2025, the most notable project includes 1,200 new condominiums planned for the San José region, with at least 600 units currently active or coming soon to market. These developments are strategically located to serve both the local population boom and international buyer demand.
Inland neighborhoods like El Tezal continue to expand rapidly to meet growing residential demand from the area's exploding population. These areas offer more affordable housing options while still providing access to Cabo's amenities and job markets.
The construction pipeline appears well-calibrated to meet demand without creating oversupply, as developers are responding to the sustained population growth of 14-16% annually and continued foreign investment interest.
It's something we develop in our Mexico property pack.
What is the current average rental yield for long-term rentals in Cabo San Lucas?
Long-term rental properties in Cabo San Lucas generate average gross yields of 4-6% per year as of September 2025.
Short-term vacation rentals offer higher potential returns, with well-managed properties near beaches or nightlife areas generating 6-10% gross yields, occasionally more during peak demand periods. The short-term rental market benefits significantly from Cabo's robust tourism industry.
Net yields after management fees, maintenance, and expenses typically range from 4.5-5.5% for long-term rental strategies, while successful short-term rental operations can achieve 8-10% net returns when properly managed.
The rental market remains strong due to the area's population growth, tourism industry workforce needs, and seasonal demand from visitors. Properties in prime locations with ocean views or easy beach access command the highest rental premiums.
How has the number of foreign property buyers changed in the past five years?
Foreign buyer activity has intensified dramatically over the past five years, with American and Canadian purchasers now dominating most high-end transactions in Cabo San Lucas.
International demand has become a primary driver of price appreciation, particularly for turnkey properties and luxury homes with ocean views. The remote worker and retiree segments have emerged as especially strong contributors to this growth trend.
The pandemic accelerated this trend as many North Americans sought second homes or permanent relocation options in Mexico. Cabo's proximity to the United States, established infrastructure, and favorable exchange rates have made it particularly attractive to foreign buyers.
This foreign investment has fundamentally changed the market dynamics, with international buyers often willing to pay premium prices for properties that meet their standards for luxury amenities, ocean access, and turnkey readiness.
What is the projected tourism growth rate for Cabo San Lucas over the next decade?
The annual tourism growth rate has stabilized at 5-7% year-over-year post-pandemic, with 2025 projected to set visitor records for the fourth consecutive year.
Over 4.13 million tourists were on pace for 2025, and steady increases are forecast as the market transitions from explosive to sustained growth over the next decade. This represents a maturation of the tourism sector while maintaining healthy expansion.
The tourism industry provides crucial support for the real estate market by creating employment opportunities, driving rental demand, and maintaining property values through consistent visitor spending and interest in vacation property ownership.
Infrastructure improvements, including expanded airport capacity and upgraded highways, position Cabo to handle continued tourism growth without overwhelming existing systems.
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What major infrastructure projects are planned or under construction in the area?
Several major infrastructure projects are currently underway or planned in Cabo San Lucas, designed to support the area's explosive growth and tourism demands.
The Los Cabos International Airport is undergoing significant expansion to handle increased visitor capacity. Highway upgrades are improving connectivity between Cabo San Lucas, San José del Cabo, and the broader region.
Major resort and luxury residential developments include more than 1,000 new condominium units in strategic zones throughout the area. These projects are being developed with high-end finishes to meet international buyer expectations.
Critical infrastructure improvements include expanded utilities, new medical centers, and enhanced emergency services to support the projected population growth to 800,000 residents by 2040. These investments help ensure the area can sustain continued development and maintain its appeal to both residents and investors.
What do experts forecast for the annual appreciation rate of homes in Cabo San Lucas over the next 10 years?
Real estate experts forecast annual appreciation rates of 3-7% for well-located homes in Cabo San Lucas through at least 2026, with luxury and beachfront properties likely to outperform this range.
The combination of scarce prime parcels, expanding infrastructure, and sustained global demand creates continued upward pressure on property prices. Beachfront and oceanfront properties face particular supply constraints due to coastal development regulations.
Luxury market segments may see appreciation rates at the higher end of forecasts or beyond, driven by limited inventory of premium properties and strong international buyer demand from North American purchasers.
Long-term fundamentals supporting appreciation include sustained population growth of 14-16% annually, tourism growth of 5-7% yearly, and major infrastructure investments that enhance the area's desirability and accessibility.
It's something we develop in our Mexico property pack.
How are interest rates and mortgage availability expected to change in Mexico in the coming years?
Interest rates in Mexico are expected to trend steady or slightly lower in the coming years, with ongoing improvements in mortgage availability for both foreign buyers and Mexican nationals.
Dollar buyers continue to benefit from favorable exchange rates when purchasing properties in Cabo San Lucas, making Mexican real estate more accessible to international purchasers. The purchasing process for foreign acquisition remains robust through the established fideicomiso (bank trust) system.
Mexican financial institutions have increased their comfort level with foreign buyers over recent years, streamlining the mortgage process and offering more competitive terms for qualified international purchasers.
The stable political and economic environment in Mexico, combined with the proven track record of the Los Cabos real estate market, supports continued access to financing for property purchases in the region.
What government policies or regulations could significantly impact property prices in Cabo San Lucas?
| Policy Area | Current Status | Potential Impact on Prices |
|---|---|---|
| Foreign Ownership | Allowed via fideicomiso bank trust | Supports continued international demand |
| Coastal Development | Strict regulations limit new construction | Restricts supply, supports price appreciation |
| Tourism Sector Support | Government backing for infrastructure | Positive for property values and demand |
| Taxation on Foreign Buyers | No recent restrictive measures | Stable regulatory environment |
| Infrastructure Investment | Major projects underway | Enhances area desirability and values |
| Environmental Protection | Limits on coastal development | Preserves scarcity value of existing properties |
| Zoning Regulations | Stable with controlled development | Maintains market balance and property values |
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.
Cabo San Lucas represents an exceptional real estate opportunity driven by unprecedented population growth, limited coastal inventory, and sustained international demand.
With appreciation forecasts of 3-7% annually and strong rental yields of 4-10%, the market offers compelling fundamentals for both investment and lifestyle purchases over the next decade.
Sources
- The LatinVestor - Cabo San Lucas Price Forecasts
- Goldsmith Group Los Cabos - Average Home Costs
- Own in Cabo - Real Estate Market
- Karla Erick Cabo Realty - Median House Prices 2025
- Properstar - Cabo San Lucas House Prices
- Baja Properties - Chileno Bay Investment Analysis
- Mexico News Daily - Los Cabos Population Growth
- Gringo Gazette - Los Cabos Growth Projections
- YouTube - Cabo Development Projects
- The LatinVestor - Cabo San Lucas Property Analysis