Market Trends of Residential Real Estate Industry In Latin America
Increase in urbanization boosting demand for residential real estate
The economies of Latin America range from emerging economies such as Mexico and Brazil to more established economies such as Chile and Uruguay, providing investors with diversified real estate investment opportunities that match their risk tolerance and investment objectives. In addition, Latin America has one of the highest urbanization rates in the world. As a result, demand for residential and commercial properties is on the rise.
The economic growth of many Latin American economies is boosting real estate demand. For instance, the economic growth of Brazil is projected to be 2.5 % in 2023, and the economic growth of Mexico is expected to be 2.1 % in 2023. Economic growth in Latin America creates jobs and increases disposable income, which in turn boosts real estate demand.
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 housing.
Increase in residential property prices in Mexico
The Federal Mortgage Society (FMS) reported that the average home price in Mexico reached USD 90,850 in Q1 2023, a year-on-year (YoY) increase of 11.7%. Mexico's housing market has seen steady growth over the last decade, adapting to the fluctuations of global economic conditions. The growth in Q1 is a testament to the resilience and potential of the Mexican housing market. High inflation has also led to an increase in construction costs, resulting in an even higher increase in house prices for new builds, which account for 40% of Mexico's housing market, rising 12.8%.
Prospective investors looking to invest in Mexico and Riviera Maya, in particular, are in for a treat. The current bullish market is a testament to the strength and prospects of Mexico's real estate market. In 2023, it was anticipated that continuous demand and strong economic growth would drive up property prices in Mexico. With a focus on regions like Riviera Maya, the housing market in Mexico is set to continue its upward trend, providing exciting prospects for investors and homeowners.
