Analyst Opinion
The Real Estate market in Mexico has been experiencing significant growth and development in recent years. Customer preferences:
Trends in the market:
One of the key trends in the Mexican real estate market is the increasing demand for residential properties. This is driven by a growing population, urbanization, and an expanding middle class. As more people move to urban areas, the demand for housing continues to rise. Developers are responding to this trend by constructing new residential projects, including apartments, townhouses, and gated communities. Another trend in the market is the rise of mixed-use developments. These projects combine residential, commercial, and retail spaces in a single development, creating vibrant and self-contained communities. This trend is driven by the desire for convenience and accessibility, as residents can live, work, and shop in the same area. Mixed-use developments also offer a variety of amenities, such as parks, gyms, and restaurants, which further attract buyers and tenants.Local special circ*mstances:
Mexico has a unique geographical location, with a long coastline along the Pacific Ocean and the Gulf of Mexico. This has led to the development of a thriving vacation rental market, particularly in popular tourist destinations such as Cancun, Playa del Carmen, and Puerto Vallarta. Many investors are purchasing properties in these areas with the intention of renting them out to tourists, generating income and capital appreciation.Underlying macroeconomic factors:
Several macroeconomic factors have contributed to the growth of the real estate market in Mexico. One of the key factors is the country's strong economic performance, with steady GDP growth and low inflation. This has created a favorable investment climate, attracting both domestic and foreign investors. Additionally, Mexico has implemented reforms to improve its business environment and attract foreign direct investment, further boosting the real estate sector. Another factor driving the market is the availability of mortgage financing. Over the years, Mexico has made efforts to expand access to credit, making it easier for individuals to purchase properties. This has increased the pool of potential buyers and stimulated demand in the market. In conclusion, the Real Estate market in Mexico is experiencing growth and development due to customer preferences for real estate investment, the increasing demand for residential properties, the rise of mixed-use developments, the thriving vacation rental market, strong macroeconomic factors, and the availability of mortgage financing. These factors have created a favorable environment for the real estate sector in Mexico and are expected to continue driving its growth in the future.Methodology
Data coverage:
Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.
Modeling approach / Market size:
Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.
Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.
Additional Notes:
The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.
