Saturday, February 1, 2025
By SILMEXICO
THE TRUMP EFFECT IN THE MEXICAN REAL ESTATE SECTOR
National and foreign media have focused their news on the various measures that President Donald Trump has generated since his arrival at the White House on January 20. His policies put pressure on several countries in the world but especially on their main trading partners, Canada and Mexico.
One of the policies that will have great repercussions on the real estate sector in our country is the expulsion of the migrant community from the United States and repatriation to their countries of origin. Approximately 12 million Mexicans could be deported during President Trump’s term; this measure will greatly impact the development of the housing sector in Mexico, especially in the construction and improvement of homes, warned the College of Urban Planners of Mexico ( ECUM).
Great Challenges:
The arrival of compatriots represents great challenges for the real estate sector, some of these challenges are the following:
- Increased housing demand: The repatriation of so many families would force the national real estate sector to increase the housing supply, mainly the rental supply for families who are not ready to buy a property.
- Increase in the price of rents: The rapid expulsion of nationals from the United States limits the adaptation time for the real estate sector, so it is expected that in the first years the demand will exceed the supply of housing units, which would cause an increase in the income. Especially in cities that already have excess demand.
This could mean a benefit for investors looking to rent their real estate properties, although it would bring problems for different sectors of the population.
Some of these problems would be:
It would increase pressure on municipal resources: According to the College of Urban Planners of Mexico (ECUM), the ability of local governments to expand or improve services would be seriously limited by the lack of additional funds.
Overload of existing infrastructure: A significant population increase in communities that are not ready to increase their population could collapse water, electricity and sanitation systems.
Thinking about future solutions, the Mexican government is beginning to plan for the expansion of urbanization in the country. The ECUM noted that new housing estates would be integrated into the urban context, which would be part of territorial planning and would occur in the scenario of the execution of the federal government’s housing plan, which provides for the construction of 1 million homes.
Conclusion: Opportunity for Future Investors
For ECUM, a coordinated response at the federal, state and municipal levels, as well as international cooperation, is important to mitigate the effects that Trump’s policies would have on the housing sector. In conclusion, a joint effort from the public and private sectors is needed to counteract the negative effects of the sudden influx of people to our country. This generates a large area of opportunity for future investors who are interested in growing their investment portfolio into the real estate sector, an area of opportunity that can be filled as long as the needs of the new market are taken into account and adequate advice on market trends is available.
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