Authored by the expert who managed and guided the team behind the Mexico Property Pack
Everything you need to know before buying real estate is included in our Mexico Property Pack
Are you curious about how Mexico's real estate market will evolve in the coming years? Wondering which trends will shape property investments and housing developments? Eager to discover the key factors driving these changes?
We will tell you everything. Here, no guesswork; we rely only on solid data.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Mexico Property Pack
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
1) Rents in major cities like Mexico City will go up, outpacing inflation, as new rental supply dries up
Rents in Mexico City are climbing faster than inflation because there aren't enough new rental properties.
In 2023, only 1,701 homes were built in the city, and just 12% of these were affordable, priced below $39,000. This highlights a big gap between what people need and what's available. The construction of new rental properties is tough because developers need high profits to compete with government bonds, making affordable housing a challenge.
Meanwhile, Mexico City is growing with more people moving in, which means more demand for housing. Real estate experts say that the demand for homes, especially in central areas, is much higher than the supply. This imbalance is pushing property prices up.
The Sociedad Hipotecaria Federal says that 11,000 new homes are needed each year to meet the city's housing needs, but only 1,701 were built in 2023. This shortfall is a key reason why rents are rising so quickly.
In the heart of the city, the lack of new housing is even more pronounced. The limited supply of new homes is not keeping up with the growing demand, which is why property prices are expected to keep rising.
For those considering buying property in Mexico City, it's important to know that the market is tight. With ongoing urbanization and population growth, the demand for housing will likely continue to outpace supply, keeping prices on the rise.
Sources: IntelliNews, The Latinvestor, El País
2) Reforms in foreign ownership rules will spark a surge of international retirees snapping up beachfront properties!
Reforms in foreign ownership rules near coastlines are making it easier for international retirees to buy beachfront properties.
In the past, owning property in Mexico's restricted zones was a bit of a hassle, but now, thanks to changes in the law, the process is much simpler. The Foreign Investment Law of 1973 initially made it tough for foreigners to own property, but things changed in 1993. That's when amendments allowed foreigners to buy property through a fideicomiso, which is basically a bank trust. This shift led to a noticeable increase in foreign property ownership, especially in popular coastal spots like Puerto Vallarta.
Mexico's real estate market is on fire, with a 9.64% increase in the nationwide house price index in early 2024. This boom is partly because international retirees are flocking to coastal areas, drawn by the affordable and beautiful living options. The demand for these properties is pushing the market upwards, making it a hot spot for investment.
For those eyeing a slice of paradise, the changes in ownership rules are a game-changer. Now, retirees can easily secure their dream beachfront home without jumping through hoops. This is particularly appealing in areas like the Riviera Maya, where the turquoise waters and white sandy beaches are hard to resist.
Insider tip: If you're considering buying, keep an eye on the Riviera Nayarit. It's an up-and-coming area with a lot of potential for growth. The region is seeing a surge in development, and properties here are still relatively affordable compared to more established areas.
With these reforms, Mexico is becoming a top choice for retirees looking to enjoy their golden years by the sea. The combination of relaxed ownership rules and a booming real estate market makes it an attractive option for those seeking a new adventure.
Sources: The Latinvestor, Migration Policy Institute, The Latinvestor
Everything you need to know is included in our Property Investment Pack for Mexico
3) Mexico's booming middle class will go up demand for new condos with cutting-edge amenities
The expanding middle class in Mexico is fueling a higher demand for new condos with modern amenities.
In recent years, Mexico's middle class has been growing steadily, and this has been a major factor in the 15.6% increase in the construction sector in 2023. This boom is largely driven by civil works, showing a strong appetite for new infrastructure and housing. As more people move to urban areas, they are looking for homes that offer the latest comforts and conveniences.
Urbanization is on the rise, with Mexico's urban population reaching over 104 million in 2023, a 1.1% increase from the previous year. This shift means more people are settling in cities, where the demand for modern housing options is growing. The expanding urban population is a clear sign that more condos with modern amenities are needed to meet this demand.
Mexico City's infrastructure plan for 2024 highlights the focus on modern developments. The plan includes US$1.13 billion allocated for 21 priority projects, such as sustainable waste management and public space enhancements. These investments are designed to improve urban living conditions and support the development of modern housing with better amenities.
For those considering buying property in Mexico, this trend means there are more opportunities to invest in condos that offer the latest in comfort and style. The expanding middle class is not just looking for a place to live; they want homes that reflect their aspirations and provide a higher quality of life.
As cities grow and evolve, the demand for modern condos is expected to continue rising. This is a great time to explore the real estate market in Mexico, where the focus is on creating living spaces that cater to the needs of a dynamic and growing urban population.
Sources: Macrotrends, Mexico Business, BBVA Research
4) Blockchain-based land registries will revolutionize title transfers and eliminate fraud across Mexico's real estate market
Blockchain technology is revolutionizing how we handle property ownership, making title transfers simpler and reducing fraud in certain states.
In recent years, especially around 2023 and 2024, Mexico faced significant land title fraud issues due to unclear property records. This lack of clarity opened doors for fraudulent activities like seller impersonation, a problem also seen in the United States.
Successful pilot programs have shown blockchain's potential to tackle these issues. For instance, Medici Land Governance launched a blockchain-based land registry in Tulum, Mexico, creating a digital record of land ownership. This initiative demonstrated how blockchain could automate property data collection and updates, cutting down transaction times and boosting efficiency.
Partnerships between tech companies and Mexican states are key in exploring blockchain solutions for land registries. A notable collaboration is between RE/MAX and XYO Network, which uses a decentralized location-verification system to enhance property transaction security and transparency. This method not only streamlines the process but also reduces the need for intermediaries, saving costs.
Public trust in blockchain for secure transactions is high, thanks to its transparency and security through asset tokenization. This process links real-world assets to digital tokens on a blockchain, reducing fraud and boosting trust among participants. Academic research and media coverage support blockchain's potential to enhance transparency and reduce corruption in land transactions.
Sources: PR Newswire, Ledger Insights, U.Today, Chambers Practice Guides
5) U.S.-Mexico border states will experience skyrocketing home prices due to booming industrial growth and surging cross-border trade
The U.S.-Mexico border states are seeing rising home prices due to new industrial growth and cross-border trade.
In Mexico, the real estate market is buzzing, with a 9.64% jump in the house price index in early 2024. This surge is largely driven by the demand for homes in areas popular with tourists and those near industrial hubs.
Industrial investments are reshaping these regions, with foreign companies setting up shop and creating a need for more housing. By 2024, 6.7 million square meters of industrial space is expected, especially in the Northeast, Central, and Northwest areas. This influx includes at least 450 foreign companies arriving between 2024 and 2025, bringing workers and their families who need places to live.
Cross-border trade is another big player here. In 2023, trade between the U.S. and Mexico hit almost $800 billion, with Mexico as the top U.S. trading partner. Laredo, Texas, stood out as the leading international trade gateway, handling $320 billion in trade. This bustling trade scene is creating jobs and, in turn, boosting the housing market.
Government incentives are also fueling this growth. Plans to build one million homes and develop 150 urban centers are underway, promising to boost economic activity and create jobs. This investment is transforming key areas in Mexico, focusing on residential housing, industrial spaces, and vacation homes, all supported by a strong annual growth rate.
Sources: FreightWaves, The Latinvestor
Make a profitable investment in Mexico
Better information leads to better decisions. Save time and money. Download our guide.
6) Capital gains tax changes will shake up property holding times and disrupt market liquidity in Mexico!
Adjustments to capital gains taxes can significantly influence how long people hold onto their properties.
Imagine you're in Mexico, where the capital gains tax can hit as high as 35% if your profit exceeds a certain threshold. This hefty tax bite means that if you sell a property and make a profit, a big chunk of that profit could be gobbled up by taxes. So, if there's even a whisper of tax rates going up, property owners might scramble to sell before the new rates take effect, flooding the market with properties.
We've seen this play out before. In the United States, when capital gains tax rates were lowered, there was a noticeable uptick in property sales. People rushed to sell, eager to take advantage of the lower taxes. This behavior highlights how tax rates can directly impact market liquidity, which is just a fancy way of saying how easily properties are bought and sold.
When taxes are high, fewer people are inclined to sell, leading to a scarcity of available properties for buyers. This scarcity can slow down the market, making it harder for potential buyers to find what they're looking for. On the flip side, when taxes are low, the market becomes more dynamic, with more properties changing hands.
In essence, the dance of buying and selling properties is closely tied to tax rates. If you're considering buying property, keep an eye on these tax adjustments. They can be a game-changer, influencing not just your potential profit but also the overall market activity.
So, whether you're eyeing a cozy cottage or a sprawling estate, understanding how capital gains taxes work can give you an edge in the property market. It's all about timing and knowing when to make your move.
Sources: National Geographic, Encyclopedia Britannica, Agriculture.com
7) Vacation homes near hidden tourist gems will face fierce competition as developers flood the market
In 2023 and 2024, Mexico's lesser-known tourist spots are seeing a surge in new property developments.
Take Campeche, for example, where foreign investors are eyeing high-end housing and condo communities along the stunning coastline. This is part of a larger trend in Mexico's real estate sector, which is on track to hit 652 billion pesos in investments by 2025. It's not just about vacation homes; the boom includes residential areas, hotels, and shopping centers too.
Foreign companies are reshaping Mexico's real estate scene, thanks to nearshoring. By 2024, 6.7 million square meters of industrial space are expected, especially in the Northeast, Central, and Northwest regions. This means more building permits for industrial and residential projects, making the vacation home market even more competitive.
Emerging tourist destinations like Merida and Puerto Vallarta are catching the eye of international investors. In 2023, Mexico pulled in a record $36.1 billion in foreign direct investment, with big contributions from the U.S. and Canada. This flood of capital shows the confidence international investors have in Mexico's potential, heating up the competition among developers.
Vacation homes near these lesser-known spots will face tougher competition as more developers jump into the market. The influx of foreign investment is a clear sign that developers are keen to capitalize on Mexico's growing appeal.
As more players enter the scene, the landscape for vacation homes is becoming increasingly competitive, especially in these under-the-radar tourist areas.
Sources: Mexperience, Lincoln Global Partners, Rio Times Online
8) Virtual reality tours will go up international investments in Mexican real estate, eliminating the need for in-person visits
Virtual reality tours are revolutionizing how international buyers invest in Mexican real estate.
In recent years, the use of VR in real estate has skyrocketed, with Mexico's market expected to hit $771.3 million by 2024. This surge is part of a global shift towards more immersive experiences, making it easier for buyers to explore properties from anywhere in the world.
In 2023 and 2024, there was a notable increase in foreign investments in Mexican properties, with over 500,000 Americans now owning homes there. Virtual tours have been a game-changer, allowing potential buyers to view properties without the hassle and expense of travel. Properties with virtual tours get 87% more views and sell faster, proving their appeal to international buyers.
Mexican real estate agencies are jumping on the VR bandwagon, using cutting-edge tools like Matterport 3D cameras and 360° photography. These technologies offer a lifelike experience, helping buyers make confident decisions from afar. Many international buyers have successfully purchased homes without ever setting foot in Mexico, thanks to these virtual tours.
Testimonials from satisfied buyers highlight the convenience and reliability of virtual tours. They emphasize how these tours have made the buying process smoother and more accessible, especially for those unable to travel.
With the growing popularity of virtual reality in real estate, it's clear that more international buyers will be drawn to invest in Mexican properties without needing to visit in person.
Sources: The Latinvestor, Global Angle, The Latinvestor
Everything you need to know is included in our Real Estate Pack for Mexico
9) Climate change fears will go up demand for elevated, flood-resistant properties in coastal and flood-prone areas
Sea levels in the Gulf of Mexico are rising faster than almost anywhere else, increasing by about 10 mm each year since 2010.
This rapid rise is causing more frequent and severe flooding, especially during high tides, which are expected to occur two to three times more often by 2030 along coastlines, including the Gulf of Mexico.
For property buyers, this means that elevated and flood-resistant homes are becoming more desirable in these vulnerable areas.
In Mexico, the real estate market is seeing a boom in demand for such properties, driven by both locals and the influx of over 1 million Americans now living in the country.
These American buyers are particularly keen on homes that can handle the challenges posed by climate change, making flood-resistant features a top priority.
As climate concerns grow, investing in properties that are built to withstand these changes is becoming a smart move for those looking to buy in coastal and flood-prone areas.
Sources: KATC, NOAA, The Latinvestor
10) Foreign buyers will flock to Oaxaca City's hillside homes for cooler climates and vibrant culture
Foreign buyers are increasingly drawn to Oaxaca City for its cooler climates and vibrant cultural experiences.
In recent years, Oaxaca City has become a hotspot for foreign property ownership. The city's historic center, known for its well-preserved colonial architecture, offers properties at various price points, making it accessible to a wide range of buyers. This blend of affordability and charm is a major attraction for those looking to invest in a culturally rich environment.
The Mexican residential real estate market is on the rise, with a noticeable uptick in transactions involving foreign buyers. This growth is fueled by a rising demand for housing from new residents and tourists seeking longer vacations and second homes. Countries like the United States, Spain, and Canada are leading the charge in foreign direct investment, showing a strong international interest in Mexican real estate.
Surveys highlight that international retirees are particularly drawn to Oaxaca City. They are captivated by its unique cultural experiences and temperate climate. Neighborhoods such as Jalatlaco and Xochimilco are celebrated for their cobblestone streets and vibrant street art, offering a culturally immersive lifestyle that appeals to foreigners.
Additionally, the cooler climates of Oaxaca City are a significant factor for those seeking a more temperate living environment. This aspect further enhances its appeal, especially for those looking to escape harsher weather conditions elsewhere. The city's charm is not just in its climate but also in its ability to offer a rich tapestry of cultural experiences.
Foreign buyers are increasingly acquiring hillside residences in Oaxaca City, drawn by the promise of cooler climates and vibrant cultural experiences. This trend is expected to continue as more people discover the unique allure of this Mexican gem.
Sources: The Latinvestor, Responsible Vacation, Economia.gob.mx
11) 3D-printed housing will revolutionize Mexico's real estate, slashing construction times and costs dramatically
3D-printed homes are starting to pop up in select markets, and there's a good reason for it.
Back in 2021, the market for these innovative homes was valued at USD 22.8 million, and by 2030, it's expected to skyrocket to over USD 1,055.1 million. This surge shows how much interest and investment are pouring into this technology. In places like Tabasco, Mexico, entire communities are being built using 3D printing. In 2019, a project there provided 50 homes for families in need, using advanced 3D printing technology. These homes were not only affordable but also tailored to the specific needs of the local community.
In Wolf Ranch, Texas, 100 homes were built using 3D printing, and they were priced significantly lower than the average home in the area. This affordability, combined with the speed of construction, makes 3D-printed homes an attractive option for many. The environmental benefits of 3D-printed housing cannot be overlooked. Studies have shown that these homes have a lower carbon footprint compared to traditional houses, which is increasingly important as we look for more sustainable building solutions.
Moreover, 3D-printed homes have been shown to reduce construction times and costs. For instance, in Wolf Ranch, Texas, 100 homes were built using 3D printing, and they were priced significantly lower than the average home in the area. This affordability, combined with the speed of construction, makes 3D-printed homes an attractive option for many.
Additionally, the environmental benefits of 3D-printed housing cannot be overlooked. Studies have shown that these homes have a lower carbon footprint compared to traditional houses, which is increasingly important as we look for more sustainable building solutions.
Sources: 3D Printing of Homes Expands Across the Globe, ICON + New Story + ECHALE Unveil First Homes in 3D-Printed Community, Comparison of Embodied Carbon of 3D-Printed vs. Conventionally Built Houses
Get fresh and reliable information about the market in Mexico
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
12) Foreign digital nomads will flock to Guadalajara's start-up zones for unbeatable internet and cutting-edge amenities
Guadalajara is now a top choice for digital nomads seeking a blend of modern living and Mexican culture.
The city is appealing because of its affordable lifestyle and warm weather, making it a magnet for remote workers globally. A major draw is the city's enhanced internet infrastructure, thanks to a $30 million investment by a tech company in 2023 and 2024, ensuring fast and reliable connectivity.
Guadalajara's tech scene is booming, with over one-third of Mexico's IT sector calling it home. This growth has spurred the creation of coworking spaces and start-up incubators, offering digital nomads modern work environments and networking chances.
Neighborhoods like Chapultepec are especially favored for their central location and lively nightlife, making them ideal for work and play. The city's tech-friendly atmosphere and vibrant community make it a perfect spot for those working remotely.
Foreign digital nomads are particularly drawn to apartments in emerging start-up zones for their reliable internet and modern amenities. These areas provide the perfect balance of work efficiency and lifestyle enjoyment.
Sources: Remotely Serious, Alcor BPO, Digital Nomads World
13) Emerging tenant-protection laws will slash rent hikes and stall short-term rental growth!
Mexico City has shaken things up with new tenant-protection laws, including a rent control law that ties rent hikes to last year's inflation rate.
Before these laws, landlords could raise rents by up to eight times the inflation rate, making it tough for tenants to keep up. Now, with rent increases capped, tenants can breathe a little easier, knowing their rent won't skyrocket unexpectedly.
Landlords must now register all rental agreements with the city, which helps keep the rental market in check and ensures everyone plays by the rules. This means rent hikes will likely slow down, sticking closer to inflation rates, which is great for keeping tenants happy and cutting down on disputes and evictions.
But it's not all smooth sailing. Developers and investors might find these changes a bit of a headache. With rent increases capped, the profit margins on new projects could shrink, making them think twice about diving into new residential developments.
This could put the brakes on the short-term rental market's growth, as developers might be wary of building new properties under these conditions. The economic climate and potential regulatory shifts are also expected to play a role, with a predicted supply growth of just 4.7% in 2025.
So, while these laws are a win for tenants, they might slow down the short-term rental scene, as developers and investors weigh their options in this new landscape.
Sources: White & Case, Finance & Commerce, The Guarantors
14) Guadalajara's booming tech sector will go up apartment values in the city center
Guadalajara is quickly becoming a tech powerhouse, with over 1,000 tech companies expected to create 150,000 jobs by 2024.
Big names like Intel and Oracle have already set up shop, making the city a key player in 40% of Mexico's IT industry. This influx of tech giants is drawing a steady stream of professionals, eager to be part of the action.
With Apple, Google, and Meta also in the mix, Guadalajara's status as a tech hub is undeniable. These companies are not just bringing jobs; they are attracting talent, which is boosting demand for housing in tech-centric neighborhoods.
The government is on board too, with initiatives like Guadalajara Creative City aiming to turn the area into a digital media hub. This has led to $2.758 billion in foreign investment between 2019 and 2024, creating thousands of new opportunities.
Tech professionals love urban living for its amenities and lifestyle, which is why city centers are seeing a surge in housing demand. Guadalajara's strategic location and competitive costs make it a magnet for tech workers looking to relocate.
As the tech sector grows, so does the appeal of living in the city center, where the action is. This trend is set to continue, making Guadalajara an exciting place for potential property buyers.
Sources: Alcor BPO, Latam Recruit, Nucamp
Everything you need to know is included in our Property Pack for Mexico
15) Luxury beachfront villas will go up in demand as foreign buyers crave exclusive vacation homes
Luxury beachfront villas in Mexico are a hot commodity for foreign buyers looking for exclusive vacation homes.
In popular spots like Tulum, these villas can fetch around $1000 USD per night, showing just how much people are willing to pay for a slice of paradise. The luxury real estate market is booming, with projections suggesting it could hit $2.47 billion by 2023. This growth is fueled by the allure of Mexico's stunning coastlines and vibrant culture.
Mexico is also becoming a favorite for retirees and expats, especially from the U.S. Over 35,000 retirement migrants have made Mexico their home, drawn by the sunny weather and affordable living. Many plan to stay long-term, enjoying the laid-back lifestyle and rich cultural experiences.
Tourism is another big driver, with 21.87 million tourists visiting Mexican coastal areas in 2023. This influx boosts the demand for vacation homes in hotspots like Puerto Vallarta, Playa del Carmen, and Tulum. These areas are not just vacation destinations but also smart investment choices.
Property values in Mexico are on the rise, with the nationwide house price index jumping 9.64% in Q1 2024 compared to the previous year. This trend makes buying a beachfront villa not just a lifestyle choice but a savvy financial move.
For those eyeing a piece of Mexico's luxury real estate, the combination of high rental potential, a growing expat community, and rising property values makes it an attractive proposition.
Sources: iTravelNet, BBVA Research, The Latinvestor
16) Mexico's aging population will go up demand for retirement communities and senior-friendly homes
Mexico is seeing a big change with its population getting older fast.
Thanks to longer lifespans and fewer babies being born, the number of people aged 65 and over is set to grow by a whopping 277% from 2015 to 2050. This means more folks will be looking for places to live that suit their needs as they age. The government is aware of this shift and is trying to build up community support for older adults, but things are moving slowly.
With more seniors around, there's a rising demand for retirement communities and homes that are easy for older people to live in. This is a golden opportunity for real estate developers to create housing that caters specifically to seniors. The trend is catching on, and we're seeing more homes designed with seniors in mind.
Mexico is becoming a hot spot for retirees, especially from the U.S. and Canada. The affordable cost of living and great quality of life are big draws for these retirees, which is pushing up the demand for senior-friendly housing even more. Developers are taking note and starting to build homes that appeal to this growing market.
For those thinking about buying property in Mexico, this shift means there could be a good investment opportunity in senior housing. As the population ages, the need for specialized housing options will only increase, making it a potentially lucrative market.
So, if you're considering a move or investment in Mexico, keep an eye on the senior housing market. It's a sector that's poised for growth as more people look for homes that fit their lifestyle in their golden years.
Sources: AARP International, AARP Journal, Senior Living Foresight
17) Condos with coworking spaces will become a must-have as more buyers demand work-from-home solutions
In Mexico, remote work is reshaping the real estate market.
Back in 2023, a significant portion of tech professionals in Mexico, 42.1% to be exact, preferred working remotely, with another 26.6% opting for a hybrid model. This shift towards flexible work arrangements is not just a passing trend; it's becoming the norm. As more people embrace this lifestyle, the demand for living spaces that cater to remote work has surged.
Take Mexico City, for example. The city has seen a 163% year-over-year increase in demand for flexible workspaces. This isn't just about having a desk at home; it's about finding the perfect blend of home and office. Condos with coworking spaces are becoming increasingly popular because they offer exactly that.
The real estate market is catching on quickly. By the end of 2024, the number of coworking spaces worldwide was expected to reach nearly 42,000. This growth is mirrored in property listings, where coworking facilities are now a major selling point. Buyers are actively seeking out these features, making them a hot commodity.
Media coverage has amplified this trend. Stories about remote work-friendly housing are everywhere, nudging more buyers towards condos with coworking spaces. This media buzz, along with the rise of digital nomad communities in cities like Mexico City, is making these properties even more appealing.
In essence, the shift towards remote work is not just changing how we work but also where we choose to live. As more people look for homes that support their work-from-home lifestyle, condos with coworking spaces are becoming the go-to choice.
Sources: Mexico Business News, Allwork.Space, CodersLink
Don't buy the wrong property, in the wrong area
Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
18) Cross-border train lines in the north will ignite a boom in industrial parks and housing expansion!
The proposed cross-border train lines in the north are set to significantly impact the expansion of industrial parks and adjacent housing.
Thanks to the Mexican government's hefty investment in cross-border rail infrastructure, including a $7.7 billion railway expansion project, these new train lines will connect Mexico City to Nuevo Laredo and other key cities along the US border. This will not only enhance connectivity but also open up a world of economic opportunities.
Historically, when transportation links improve, regions tend to see a boost in economic growth. For example, trade between the U.S. and Mexico saw a substantial increase, with trade volumes reaching $632.3 billion from January to September 2024. Mexico even became the U.S.'s largest trading partner in 2023, and this growth is expected to continue, driving demand for industrial space in northern Mexico.
The Mexican government is also planning to develop several industrial parks along these proposed rail lines. These developments are set to boost economic activity and create jobs, with significant investments planned for sections of the passenger train lines. Real estate trends are already showing increased interest in areas near these proposed train lines, thanks to potential economic growth and job creation.
Businesses are increasingly eyeing northern Mexico for relocation due to its strategic location, cost-effective labor, and improved transportation infrastructure. This aligns with the nearshoring movement, where companies aim to cut costs and boost efficiency. The development of new industrial parks along the proposed rail lines is expected to create thousands of jobs, further fueling the expansion of industrial parks and adjacent housing.
Sources: Railway Supply, Green Worldwide, The Dialogue, T21, Dallas Fed
19) Airbnb will dominate, driving investors to transform properties into lucrative vacation rentals
Short-term rental platforms like Airbnb are thriving in Mexico, showing impressive growth and resilience.
In bustling cities like Mexico City and Cancún, Airbnb listings are booming. Mexico City boasts over 23,000 active listings, while Cancún has nearly 6,700. These properties enjoy strong occupancy rates, hovering around 65%, making them attractive for investors.
Tourism is a major driver of this growth. In the first half of 2024, Mexico welcomed over 10 million international tourists, marking a 5.5% increase from the previous year. This influx of visitors has significantly boosted the tourism sector's revenue, which has risen by 36.3% from pre-pandemic levels, underscoring Mexico's allure as a top travel destination.
Travelers are increasingly drawn to vacation rentals for their value and unique experiences, steering away from traditional hotels. This shift is evident in the higher average daily rates for short-term rentals, which are more profitable than long-term leases. For example, the average daily rate in Mexico City is MXN995, while in Cancún, it's MXN1,046.
Investors are taking note of these trends, recognizing the potential for lucrative returns. The combination of high occupancy rates and attractive daily rates makes short-term rentals a compelling investment opportunity. Furnishing properties for vacation rentals is becoming a popular strategy to capitalize on this demand.
With the continued rise in tourism and the growing preference for unique travel experiences, the short-term rental market in Mexico is poised for sustained growth. This trend is likely to encourage more investors to enter the market, further fueling its expansion.
Sources: Airbtics, Mexico Business News, Airbtics
20) New cross-border mortgage programs will flood Mexico City’s upscale neighborhoods with North American investors snapping up condos
Over 1 million Americans now call Mexico home, with a significant number owning properties.
Mexico City is a hotspot, especially in its upscale neighborhoods, where property values are climbing thanks to strong demand from expats and retirees. This trend is fueled by new financial options that make buying easier for North Americans.
One game-changer is the rise of cross-border mortgage programs. These are tailored for U.S. and Canadian residents looking to invest in Mexican real estate, allowing them to secure loans based on their foreign income, like pensions.
Partnerships between Mexican and North American banks are smoothing the way for these cross-border loans. Mexican banks with global ties are offering loans in USD through their U.S. branches, making it simpler for North Americans to finance their property purchases.
These financial collaborations are a big deal because they remove many of the traditional barriers to buying property in Mexico. Now, North American investors can more easily tap into the growing real estate market in Mexico City.
With these new mortgage options, investors have more flexibility and can take advantage of the rising property values in Mexico City’s most sought-after areas.
Sources: Mexperience, Wise, The Latinvestor