Residential Real Estate Market In Mexico - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Residential Real Estate Market In Mexico - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Residential Real Estate Market in Mexico is expected to register a CAGR of approximately 7% during the forecast period (2022-2027).

COVID-19 has impacted every aspect of the Mexican economy, just as it has the world economy. The real estate industry has suffered significant hurdles, particularly in terms of demand. Housing sales in Mexico City have dropped sharply from a high of 6,048 at the end of 2019 to 3,463 in the middle of 2020, owing to a lack of financial stability brought on by an unexpected recession.

Mexico’s housing market remains healthy, amidst improving economic conditions. The nationwide house price index rose by 7.72% during Q2 2021, following y-o-y increases of 6.59% in Q1 2021, 5.38% in Q4 2020. On a quarterly basis, house prices rose by 2.29% during Q2 2021.

Mexico Residential Real Estate Market TrendsIncreasing Residential Real Estate Demand by Young People

The Mexican residential real estate industry is growing due to young people demanding a place to live. The housing demand projected for the next few years will be driven by people under 30 years (representing 55% of the country’s population). The Bajio zone, formed by Aguascalientes, San Luis Potosí, Guanajuato, and Querétaro, as well as the northern region of Mexico, are areas of special interest.Cities, like Monterrey, are currently growing because of the demand for corporate and residential spaces. The growth of tourism in destinations, such as Cancun, Los Cabos, and Puerto Vallarta, also encourage real estate developments.

Increase in Average Housing Price in Mexico

The graph shows an increase in Mexico's average housing prices in Q1 2021, compared to Q1 2020. In the first quarter of 2021, Mexicans paid, on average, 1.31 million Mexican pesos to acquire a residential property. Compared to the same period of the previous year, the nominal price increased by more than 15%.Mexico City registered the highest price for this type of property, with an average exceeding three million pesos per residential unit as of the first quarter of 2021. Compared to renting or borrowing, house ownership is the favored form of housing tenure in Mexico. In 2020, nearly 69 percent of all Mexican households owned their homes, while only 17 percent rented them. Moreover, roughly 87 percent of the owned households in the country were completely paid off, while the remaining households were still in the payment process.

Mexico Residential Real Estate Market Competitive Analysis

The Mexican residential real estate market is fragmented due to the presence of many players in the market. The housing market is not driven by speculators. There are many developers, and the market is highly competitive. Access to financing has become an indispensable component of the Mexican residential market, with public institutions and private banks having a key role. Some of the major players are Ruba, Consorcio Ara, Sab de CV, Grupo Garza Ponce, Groupo Lar and Grupo Jomer.

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• The market estimate (ME) sheet in Excel format
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