Get it or Regret it: Mexico’s Real Estate Boom for Dummies

Let us discuss a particular real estate opportunity that you might not hear about on CNN or Fox news, or you probably will not read about it the newspapers either, and if you did, it would be old news, and when it is old news, the profits are too small to bother. So what is this opportunity we are talking about? Well, we are discussing the emerging real estate in Mexico in Latin America.

Why Mexico’s Real Estate is a Perfect Opportunity?

The market for recreation and vacation properties in Mexico is booming. Most of the activities are centered on New Market such as the Puerto Piniasco and San Philip in Baha California, but growth is also noticed in the most well-known areas like Puerto Viarta. However, most of us have concerns about investing in these places, particularly after the construction industry reached rock bottom in 2002. However, since then, the Mexican construction industry has been in the clear and present growth and showing growth rates over the GDP rates since 2003, and in 2004 since, it has been showing double-digit growth rates. These growth rates were maintained at 20% compared to 2005.

The driving force behind the sudden surge in the construction growth can be attributed to the big picture economic fundamentals such as politics, recent laws; they are all helping to trigger building sprees in the residential and commercial properties.

Factors Favoring the Real Estate Growth in Mexico

Mexican construction has been plagued with problems, such as, high financing rates but this problem has not affected the real estate boom since it has targeted mainly the working and middle classes, here the focus is on affordable housing. Mexico’s lower interest rates, which is now around 7%, well below the 1990s, post the evaluation high’s and they are half of what they were just two years ago. All these factors have led the cheaper mortgage financing which means while Mexico’s economy in general maybe has puttered along, but the real estate, especially in the residential area has been on the rise.

Mexico and Brazil who have traditionally lagged behind have exceeded GDP projections for 2006 growing at 4.6% and 4.5% respectively. These forecasts are not only good for international real estate investors, but also for foreign commodities companies like Mexico Cemex, which is one of the world’s largest cement traders.

Investors are now protected by US title insurance, Bonded Escro accounts, and also laws on renewable property trusts established to specifically protect foreign investors which give them all the rights to enjoy, buy and sell property in Mexico.

Political environment and the lack thereof can become a concern, however, the past have proven that the political environment in Mexico is going strong and the laws have been made to protect local and foreign investors. The rise of the real estate market has been going constant since 2002 and is expected to exceed projections in the near future.

And perhaps, this is the perfect time that interested real estate investors buckle themselves and make the most out the industry!