RESIDENTIAL REAL ESTATE MARKET IN MEXICO - GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2023 - 2028)

The Residential Real Estate Market in Mexico is Segmented by Type (Apartments and Condominiums and Landed Houses and Villas). The report offers market size and forecasts for the Residential Real Estate Market in Mexico in value (USD billion) for all the above segments.

Mexico Residential Real Estate Industry Overview

Mexico Residential Real Estate Market Summary
Study Period: 2018-2027
CAGR: > 7 %

Major Players

Mexico Residential Real Estate Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Mexico Residential Real Estate Market Analysis

The residential real estate market in Mexico is expected to register a CAGR of approximately 7% during the forecast period. COVID-19 impacted every aspect of the Mexican economy, just as it has the world economy. The real estate industry suffered significant hurdles, particularly in terms of demand. Housing sales in Mexico City had 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.

  • With 127.6 million inhabitants, Mexico is the second most populated Latin American country, only surpassed by Brazil. The State of Mexico alone houses more people than some European countries such as the Netherlands, Belgium, or Portugal.
  • The most typical type of housing tenure is home ownership in several Latin American nations. For instance, in Mexico, only 15% of households rent their residence, compared to more than two-thirds who do not. As a result, the purchase of both new and used homes accounts for a sizable share of all consumer real estate investments in North America.
  • When compared to household investments or subsidies, which do not exceed 25% of funding, credit options offered by the public or private sector represent the main source of home financing in Mexico, accounting for close to 75% of the funding. This is in response to the country's consistently high housing demand.
  • 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.
  • When prices during the second half of July 2018 were compared to those in October 2022, the housing sector in Mexico recorded a Consumer Price Index (CPI) of 111.53 points, suggesting an increase in housing costs of 11.53% over a four-year period. One of the industries in Mexico with the lowest inflation rate was the housing market.

Mexico Residential Real Estate Industry Segments

Residential real estate is an area developed for people to live in and cannot be used for commercial or industrial purposes. It emerges when land sanctioned for residential use is purchased by someone, which becomes real property and encompasses a large variety of potential dwellings, from houses to houseboats and from neighborhood types ranging from the poorest slum to the wealthiest suburban subdivision.

The residential real estate market in Mexico is segmented by type (apartments and condominiums and landed houses and villas). The report offers market size and forecasts for the residential real estate market in Mexico in value (USD billion) for all the above segments.

A complete assessment of the residential real estate market in Mexico includes an assessment of the economy and the contribution of the sector to the economy, a market overview, market size estimation for key segments, and emerging trends in the market segments covered in the report. The report includes government regulations and initiatives and key trends in this sector. The report sheds light on market trends like growth factors, restraints, and opportunities in this sector. The competitive landscape of the residential real estate market in India is depicted through the profiles of active key players. The report also covers the impact of the COVID–19 pandemic on the market and future projections.

By Type
Apartments and Condominiums
Landed Houses and Villas

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Mexico Residential Real Estate Market Trends

Increasing Residential Real Estate Demand by Young People

According to the Q4 of 2021, the generation of young adults between the ages of 27 and 40 is driving the growth in housing demand. Since they can now buy a home far from their workplaces or in neighborhoods that fulfill their social and economic expectations, this sector has benefited greatly from the adoption of a new kind of working from home. For instance, in Mexico City, closeness to work hubs has taken a backseat.

Since the trend now is to have "home offices," that is, work from home or from a property anywhere in the country, this change in working conditions opens up a variety of chances for housing developers around the nation.

Real estate developments must respond to this new requirement by updating the complex's recreational areas and ensuring technical coverage while also adjusting to new market trends and preferences.

With this innovative method of working, employees can conduct their tasks from wherever makes them feel most at ease, giving them the option of working in the heart of Mexico, the United States, Canada, or anywhere else in the world while conducting "home offices" from the Riviera Maya.

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.

The statistic shows Mexico's age distribution between 2011 and 2021. About 25.49% of Mexicans in 2021 were under the age of 14, 66.68% were between the ages of 15 and 64, and 7.83% were 65 or older.

Residential Real Estate Market in Mexico- Mexico Population Age Distribution (2014-2021)

Increase in Average Housing Price in Mexico

The graph shows an increase in Mexico's average housing prices by State. Mexicans paid, on average, MXN 1.31 million (USD 6.76 million) 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 MXN 3 million (USD 1.54 million)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% of all Mexican households owned their homes, while only 17% rented them. Moreover, roughly 87% of the owned households in the country were completely paid off, while the remaining households were still in the payment process.

Mexico City was the most expensive city in which to buy a home in the first quarter of 2022. The average price of real estate in the nation's capital city is about MXN 3 million (USD 1.54 million), or roughly double the national average.

With a contribution to the GDP of over 6%, the housing sector is one of Mexico's most important and steady markets. With only 15% of homes being rented, the market is mostly an owners market, with approximately 69% of properties in the nation being fully paid off by their owners. Nationally, housing costs had been rising until the start of 2021. The country saw a 15% increase in residential property prices between Q1 2020 and Q1 2021.

Average housing price: in 1,000 MXP, top 10 states, Mexico, in 1st quarter 2022

Mexico Residential Real Estate Market Competitor Analysis

The residential real estate market in Mexico 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.

The real estate sector is expected to benefit from Mexico's economic recovery in 2023, which will follow the stage of adaptation and transformation to the pandemic's conditions. In the third quarter of 2021, the real estate sector ranked second in importance, accounting for 12.38% of the economy's sectors and first in terms of tertiary activities. After the COVID-19 outbreak, which resulted in the loss of millions of jobs in 2021, the real estate industry in Mexico would be able to help spur economic growth and employment creation.

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.

Mexico Residential Real Estate Market Top Players

  1. Ruba

  2. Consorcio Ara, Sab de Cv

  3. Grupo Garza Ponce

  4. Group Lar

  5. Grupo Jomer

*Disclaimer: Major Players sorted in no particular order

Ruba. Consorcio Ara, Sab de Cv, Grupo Garza Ponce, Group Lar, Grupo Jomer

Mexico Residential Real Estate Market Recent Developments

  • August 2022: Black Creek Mexico (BCM) announced that Marriott Vacations Worldwide affiliates had completed the sale of the Westin Resort & Spa, Puerto Vallarta, to Grupo Alojica. Marriott International operates the 280-room oceanfront resort in Puerto Vallarta, Jalisco, Mexico, under the Westin Hotels & Resorts name. The hotel will undergo a transformative capital improvement plan by BCM that will upgrade the hotel's pool, spa, fitness center, and other recreational facilities, in addition to completely renovating all guestrooms and public spaces.
  • January 2022: Habi, a Colombia-based real estate startup sponsored by SoftBank Group Corp., announced that it had acquired a Mexican competitor, making it the largest tech-based purchaser of residential properties in a nation that is increasingly attracting the attention of other property technology companies.

Mexico Residential Real Estate Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Current Economic Scenario and Consumer Sentiment

    2. 4.2 Residential Real Estate Buying Trends - Socioeconomic and Demographic Insights

    3. 4.3 Government Initiatives and Regulatory Aspects for the Residential Real Estate Sector

    4. 4.4 Insights on Size of Real Estate Lending and Loan to Value Trends

    5. 4.5 Insights on Interest Rate Regime for General Economy, and Real Estate Lending

    6. 4.6 Insights on Rental Yields in the Residential Real Estate Segment

    7. 4.7 Insights on Capital Market Penetration and REIT Presence in the Residential Real Estate Market

    8. 4.8 Insights on Affordable Housing Support Provided by Government and Public-Private Partnerships

    9. 4.9 Insights on Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, and Property Management)

    10. 4.10 Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Drivers

    2. 5.2 Restraints

    3. 5.3 Opportunities

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Type

      1. 6.1.1 Apartments and Condominiums

      2. 6.1.2 Landed Houses and Villas

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Market Concentration

    2. 7.2 Company Profiles

      1. 7.2.1 Ruba

      2. 7.2.2 Consorcio Ara, Sab de CV

      3. 7.2.3 Grupo Garza Ponce

      4. 7.2.4 Groupo Lar

      5. 7.2.5 Grupo Jomer

      6. 7.2.6 Grupo HIR

      7. 7.2.7 Inmobilia

      8. 7.2.8 Groupo Sordo Madaleno

      9. 7.2.9 Aleatica

      10. 7.2.10 Ideal Impulsora Del Desarrollo*

    3. *List Not Exhaustive
  8. 8. FUTURE OF THE MARKET

  9. 9. APPENDIX

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Mexico Residential Real Estate Market Research FAQs

The Residential Real Estate Market in Mexico market is studied from 2018 - 2027.

The Residential Real Estate Market in Mexico is growing at a CAGR of >7% over the next 5 years.

Ruba, Consorcio Ara, Sab de Cv, Grupo Garza Ponce, Group Lar, Grupo Jomer are the major companies operating in Residential Real Estate Market in Mexico.

Residential Real Estate in MexicoIndustry Reports

In-depth industry statistics and market share insights of the Residential Real Estate Market in sector for 2020, 2021, and 2022. The Residential Real Estate Market in research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Residential Real Estate Market in report PDF.

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