June 27, 2024
Sales DepartmentThe real estate market in Mexico has shown constant growth in recent years. According to “El Economista”, in 2022 the housing industry represented 5.7% of the national GDP, consolidating itself as one of the main drivers of the country’s economy.
Identifying opportunities in this market can be the key to making successful investments. Here we share some essential points that you should keep in mind:
1. Market Analysis
To identify opportunities, you must first understand the market. This involves studying trends, prices and demand in different areas.
For example, according to a report from the Federal Mortgage Society, in 2023 the states with the greatest growth in housing prices were Quintana Roo, Yucatán and Baja California Sur, with increases of 9%, 8.5% and 8.2%, respectively. These states present interesting opportunities due to the increase in demand.
A particular case is Oaxaca: although it is commonly thought to be an affordable place to purchase a home, high demand and limited supply have raised prices, making purchasing a property inaccessible for the majority.
2. Demography and Population Growth
Population growth and demographics play a crucial role. Cities with high population growth tend to have a greater demand for housing, which increases real estate prices.
For example, INEGI reports that between 2015 and 2020, the population in Querétaro grew 2.7% annually, driving demand for new homes. This represents a great opportunity for anyone dedicated to construction.
3. Urban and Infrastructure Developments
New urban developments and infrastructure projects may indicate opportunities. Transportation improvements, such as new subway lines or highways, often increase the value of nearby properties.
The Mayan Train, expected to be completed in 2024, has generated significant interest in properties near its stations in southeastern Mexico. The areas surrounding the train are expected to experience considerable real estate growth.
4. Economic and Political Factors
Economic and political stability is essential. Factors such as low interest rates can increase the accessibility of mortgage loans, increasing the demand for properties.
For example, the Bank of Mexico maintained the reference interest rate at 4.25% for much of 2023, encouraging investment in real estate. Additionally, the recent decline of the Mexican peso against the US dollar and the Canadian dollar has created significant investment opportunities in properties valued in Mexican pesos.
5. Opportunities in Emerging Markets
Identifying emerging markets is crucial to capturing trends and maximizing returns. These markets, characterized by growing economies and large development projects, present unique opportunities.
In Mexico, cities like Mérida in Yucatán have seen an increase in real estate investment. Mérida, for example, reported 6% growth in the real estate market in 2023, driven by its quality of life and safety.
6. Use of Technology and Data
Technology plays a vital role in market analysis. Tools like big data analytics and artificial intelligence platforms can help you identify trends and opportunities before others.
7. Return on Investment (ROI) Analysis
Calculating the potential return on investment before making any purchase is crucial. A healthy ROI for residential properties in Mexico is between 6% and 8% annually.
8. Sustainability and Sustainable Development
Sustainable development and sustainability are in trend. More and more people want to live in planned, environmentally friendly communities. Demand for sustainable properties is increasing, offering long-term opportunities.
How to take advantage of these opportunities
- Diversify your Portfolio: Diversifying your investments in different types of properties and locations can minimize risks.
- Get Advice from Professionals: Working with real estate agents, financial advisors and specialized lawyers can give you a broader perspective and help you make informed decisions.
- Stay Informed: The real estate market is constantly changing. Stay up to date with the latest news, regulations and trends in the sector.
- Take Advantage of Financing and Subsidies: Find out about the different financing and subsidies available. For example, Infonavit and Fovissste offer attractive financing options for the purchase of homes.
- Renegotiation and Resale: Consider the possibility of renegotiating financing terms or improving properties to increase their value and then resell them.
In summary, the real estate market in Mexico offers numerous opportunities, but requires careful research and planning to make the most of them. We hope that these tips are useful to you to identify and take advantage of opportunities in the real estate market.
If you want to invest and need professional advice, reach out to SILMÉXICO, where our experts will help you achieve your investment goals.
