Mexico's real estate market remains healthy

In the midst of better economic conditions. The national house price index increased by 7.72% during the year 2021, until the second quarter.

The takeoff of Mexico's real estate market comes after a decade of slow growth in real (inflation-adjusted) terms, despite strong nominal growth.

Foreign demand is also robust. Despite the pandemic, US and Canadian buyers continue to return to Mexico, after a multi-year slump, thanks to low oil prices and a strong US dollar, driving up home values. More than 1 million Americans live in Mexico and more than 500,000 own homes in the country, according to a Forbes article.

For example, Playa del Carmen, one of the largest cities on Mexico's Riviera Maya coast, has seen a sharp increase in demand from homebuyers seeking refuge from pandemic-related lockdowns.

“We have a history of being traditionally a buyer's market because there is so much inventory; I like to say that there is a lot of candy in the candy store,” said Judi Shaw, owner of Living Riviera Maya Real Estate. “But all of a sudden we had a lot of long-standing inventory that was sold out last year and early this year. So that makes it a more balanced market.”

This is supported by other local real estate experts, including Jason Waller, owner of Playa Real Estate Group: "We have a lot of clients from New York and a lot of people are looking for waterfront homes so they can enjoy life on the coast."

In the last three years, the value of the Mexican peso (MXN) depreciated 6.1% against the US dollar, reaching an average exchange rate of USD 1 = MXN 20,087 in August 2021.

Since the Mexican real estate market is not driven by speculators, it has been resilient despite the pandemic. In fact, house prices are expected to continue rising for the rest of the year, according to local real estate experts.

During 2020, the economy slumped a whopping 8.2%, its biggest annual contraction since the 1930s, according to the National Institute of Statistics and Geography (INEGI). But economic conditions are now improving dramatically. Mexico's economy posted a whopping 19.6% year-on-year growth in the second quarter of 2021, after eight consecutive quarters of economic recession, as the country grappled with the double whammy of the COVID-19 pandemic and energy shortages .

Due to the solid performance of the economy during the last quarter, the International Monetary Fund (IMF) recently revised upwards its 2021 growth forecast for Mexico to 6.3% from its initial estimate of a 5% expansion.

Source: Global Property Guide