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
What will happen in Mexico’s real estate market? Will prices go up or down? Is Mexico City still a hotspot for foreign investors? How is Mexico’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Mexico, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) Rents in Mexico City will rise faster than inflation because new rental supply is limited
Rents in Mexico City are rising faster than inflation because there aren't enough new rental properties.
In 2023, only 1,701 homes were built in Mexico City, and a mere 12% of these were affordable, priced below $39,000. This highlights a big gap between what people need and what's available. The city's ongoing urbanization and population growth are adding fuel to the fire, as more people flock to the city, increasing the demand for housing.
The government predicts a housing deficit of 2.8 million homes by next year, which shows how urgent the housing shortage is. Real estate market analyses reveal that demand for housing in Mexico City is outpacing supply, especially in prime central areas. This imbalance is expected to keep pushing property prices up.
Foreign investment is also playing a role in driving up prices, particularly in desirable neighborhoods. This influx of investment is further boosting demand for properties, making it even harder for locals to find affordable housing.
Sources: IntelliNews, El País
2) More international retirees will buy beachfront properties due to changes in foreign ownership rules near coastlines
Reforms in foreign ownership rules near coastlines are making it easier for international retirees to buy beachfront properties.
In recent years, Mexico has become a hotspot for foreign property ownership, with over 1 million Americans now residing there and more than 500,000 owning homes. This surge is partly due to a 9.64% year-over-year increase in the nationwide house price index in early 2024, making investment in Mexican real estate more attractive.
Historically, changes in property laws have led to spikes in foreign purchases, especially in coastal areas. A key moment was the 1993 amendment to the Foreign Investment Law, which allowed foreigners to buy property in restricted zones through a fideicomiso, or bank trust. This change resulted in a notable increase in foreign ownership in popular coastal areas like Puerto Vallarta, drawing in international buyers eager for a slice of paradise.
International retirees are particularly drawn to beachfront properties, driven by economic factors such as the lower cost of living and high healthcare costs in their home countries. The growing number of U.S.-born seniors moving to Mexico underscores this trend, as they seek out favorable policies and economic conditions that make retirement more affordable and enjoyable.
These reforms are not just about making purchases easier; they are reshaping the landscape of coastal real estate. With more retirees looking for beachfront homes, local markets are adapting to meet this demand, offering a range of properties that cater to international tastes and budgets.
As more international retirees consider Mexico for their golden years, the combination of favorable property laws and economic incentives is likely to continue driving interest in beachfront properties, making it a prime destination for those seeking a new home by the sea.
Sources: Migration Policy Institute, Global Property Guide
From this video, we realize that changes in legal ownership structures are making it easier for foreigners to invest in coastal real estate.
3) Demand for new condos with modern amenities will rise as the middle class expands
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 land registries will make title transfers easier and cut fraud in some states
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) Home prices in U.S.-Mexico border states will rise due to industrial growth and increased 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 house price index saw a 9.64% jump in early 2024, showing a strong market driven by demand, especially in tourist areas. This is not just a random spike; it's a reflection of how the real estate scene is changing, with more people wanting to live where the action is.
Industrial investments are a big part of this story. Foreign companies are setting up shop in Mexico, with 6.7 million square meters of industrial space expected by 2024. This is happening mainly in the Northeast, Central, and Northwest regions. With at least 450 foreign companies expected to arrive between 2024 and 2025, there's a natural uptick in housing demand as workers and their families move in.
Cross-border trade is another key player. In 2023, trade between the U.S. and Mexico hit almost $800 billion, making Mexico the top U.S. trading partner. Laredo, Texas, stood out as the No. 1 international trade gateway, with $320 billion in trade that year. This bustling trade activity is boosting the economy in border areas, pushing home prices up as more people want to live near these economic centers.
For those considering buying property in these regions, it's worth noting that the economic growth isn't just a flash in the pan. The combination of industrial expansion and trade is creating a lasting impact, making these areas attractive for both living and investment.
As more companies and trade flow into these border states, the demand for housing is likely to keep climbing. This trend is reshaping the real estate market, offering opportunities for those looking to invest in a growing area.
Sources: FreightWaves
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6) Competition for vacation homes near lesser-known tourist spots will intensify as more developers enter 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
Our team found this video illustrating the development boom in previously undiscovered locations, showcasing increased competition in these emerging markets.
7) More international buyers will invest remotely due to virtual reality tours
Virtual reality tours are revolutionizing how international buyers invest in real estate.
In Mexico, the real estate market is booming, with over 500,000 Americans now owning homes there. This surge in foreign investment has been a major factor in the 9.64% rise in the nationwide house price index in early 2024. Virtual tours are at the heart of this trend, offering a way for buyers to explore properties without hopping on a plane.
More than half of adults in Mexico have tried virtual property tours, and it's clear why. Listings with these tours get 87% more views and sell for 9% more on average. Buyers love the convenience and detail, and they're willing to pay extra for it.
Companies like Beverly Boy and Baja Real Estate Group are setting the standard by using cutting-edge tools like Matterport 3D cameras and 360° photography. These technologies make it possible for international buyers to make smart decisions without ever stepping foot on the property.
With the market in Mexico projected to hit $771.3 million in 2024, the demand for immersive and interactive experiences is only growing. Virtual reality tours are making it easier than ever for buyers to explore properties from anywhere in the world.
As these technologies become more widespread, expect even more international buyers to invest in properties without visiting in person. The convenience and efficiency of virtual tours are undeniable, and they're here to stay.
Sources: National Geographic, Encyclopedia Britannica, Agriculture.com
8) Demand for elevated and flood-resistant properties will grow in coastal and flood-prone areas due to climate change concerns
Climate change is reshaping real estate priorities, especially in coastal and flood-prone areas.
In the Gulf of Mexico, sea levels have been rising at about 10 mm per year since 2010, making it one of the fastest rates globally. This increase is causing more frequent flooding, particularly during high tides, which is a growing concern for property owners. As a result, insurance premiums are climbing in these vulnerable regions, reflecting the heightened risk of damage.
While specific data for Mexico isn't available, it's reasonable to expect similar trends there due to the rising sea levels and increased flooding. This has made flood-resistant properties more appealing to buyers who are looking to protect their investments from potential damage.
The real estate market in Mexico is thriving, with a notable rise in demand for both residential and vacation properties. A significant factor in this boom is the interest from foreign buyers, including over a million Americans, who are particularly drawn to elevated and flood-resistant homes. This trend is expected to continue, with residential housing investments projected to grow significantly from 2024 to 2025.
For those considering a property purchase in Mexico, understanding these dynamics is crucial. The appeal of flood-resistant properties is not just about safety; it's also about securing a sound investment in a changing climate. As sea levels continue to rise, elevated properties are becoming increasingly attractive to savvy buyers.
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.
9) 3D-printed homes will emerge in some markets, cutting construction time and costs
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
10) Digital nomads will prefer apartments in Guadalajara’s start-up areas for good internet and modern 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
11) New tenant-protection laws will slow rent increases and may curb 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
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12) Apartment values in Guadalajara’s city center will rise due to the growing tech sector
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
13) Foreign buyers will continue to seek luxury beachfront villas for exclusive vacation homes
Luxury beachfront villas in Mexico continue to captivate foreign buyers looking for exclusive vacation homes.
The allure of these properties is evident as the luxury real estate market in Mexico is booming. In hotspots like Tulum, villas can fetch an average of $1000 USD per night, reflecting the high demand. This trend is part of a larger movement, with the luxury villa rental market projected to hit $2.47 billion by 2023.
Another factor driving this interest is the growing number of foreign retirees and expatriates settling in Mexico. Many, especially from the United States, are choosing to make Mexico their permanent home. This influx of retirees fuels the demand for comfortable and exclusive living spaces, making luxury vacation homes a top choice.
Tourism in Mexico's coastal areas is also on the rise, with 21.87 million tourists visiting in 2023. This surge in visitors boosts the appeal of luxury beachfront villas in popular destinations like Puerto Vallarta, Playa del Carmen, and Tulum, as they become sought-after vacation properties.
These villas offer more than just a place to stay; they provide a lifestyle. Buyers are drawn to the idea of owning a piece of paradise, where they can enjoy the sun, sea, and sand in privacy and comfort. The combination of natural beauty and luxury amenities makes these properties irresistible.
For those considering an investment, the steady demand and unique appeal of these villas suggest they will remain a wise choice. The blend of exclusive living and prime locations ensures their continued popularity among discerning buyers.
Sources: iTravelNet, BBVA Research, Mexico News Daily
In this video, we can see that luxury beachfront properties in Mexico continue to attract international buyers, as showcased in this high-end villa tour.
14) Demand for retirement communities and senior-friendly homes in Mexico will grow as the population ages
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
We have made this infographic to give you a quick and clear snapshot of the property market in Mexico. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
15) Demand for condos with coworking spaces will grow as more people work from home
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
16) New train lines in the north will boost industrial park growth and nearby housing development
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
17) Investors will keep furnishing properties for vacation rentals as platforms like Airbnb stay popular
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
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.