Residential Real Estate Market In Latin America - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)
Key Highlights
In 2021, the total population of Latin America was approximately 660 million inhabitants. In 2022, the population in Latin America grew by approximately 0.9% compared to the previous year. As the population is increasing, many people are moving to urban areas for better education and job opportunities. Due to the increasing urban population, there is an increase in the demand for residential properties in urban areas of Latin America. Some Latin American governments have taken steps to promote pro-poor urban infrastructure, especially in relation to housing.
This statistic shows the degree of urbanization in Latin America from 2017 to 2021. Urbanization means the share of the urban population in the total population of a country. Urbanization levels have increased significantly in Latin America. In 2021, 81.12% of the total population of Latin America lived in urban areas and cities.
Increase in Residential Property Prices in MexicoAs of the first quarter of 2021, Mexico City was the most expensive place to purchase residential property in Mexico. On average, a property in the country's capital city would cost more than MXN 3 million (USD 148 thousand), approximately MXN 1.7 million (USD 84 Thousand) above the national average.
The housing market is one of the most essential and stable markets in Mexico, contributing to approximately six percent of the country's GDP. Moreover, compared to 2020, the nominal price in 2021 increased by nearly 15 percent. Mexico City registered the highest price of a property, with the average exceeding MXN 3 million (USD 148 Thousand) per residential unit followed by Morelos and Queretaro with an average price of MXN 1.995 million (USD 98 thousand) and MXN 1.977 million (USD 97 thousand) respectively.
Up until the beginning of 2021, housing prices had been increasing nationwide. Between Q1 2020 and Q1 2021, the country recorded a 15% growth in residential property prices. Compared to renting or borrowing, house ownership is the favored form of housing tenure in Mexico. The market is predominantly an owners' market, with nearly 69% of homes in the country fully paid off by their holders, while only 15% of homes are rented.
Competitive LandscapeThe Latin American residential real estate market is highly competitive and fragmented, with the presence of regional and international players. Major companies in the market have adopted strategies such as acquisition, business development, joint venture, partnership, and product launches to offer better services to customers in the residential real estate market.The major players include JLL, CBRE, Mrv Engenharia e Participacoes SA, Homex, and Consorcio ARA, among others.
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