The housing market in Mexico’s primary tourist areas is experiencing a significant surge in prices due to high demand from tourists, national investors, and a substantial influx of foreign investment. This trend has positioned regions like Quintana Roo and Baja California Sur at the forefront of capital gains in the country, surpassing the national average.
Marisol Becerra, regional partner of 4S Real Estate, highlighted the remarkable growth in these areas. Data from the Federal Mortgage Society reveals that nationally, housing values increased by 9.7% in the first quarter of 2024, with the average housing price around 1.7 million pesos. However, Baja California Sur led the charge with a staggering annual increase of 15.7%, followed by Quintana Roo at 13.4%.
“Since last year and until today, we continue to see that the states that are above average are mainly those with tourist destinations. Those who have bought a property in 2020 or 2021 in Los Cabos, Tulum, or Playa del Carmen were very successful because these are the places that are showing the greatest dynamism in prices. There is no hidden secret to this: it is due to demand,” Becerra explained.
This pattern extends to other states such as Sonora, Baja California, and Nayarit, which complete the top five states with the highest increase in housing prices, boasting annual increases of 12.9%, 12.5%, and 12.2% respectively.
Becerra also noted that nationally, four out of every ten units sold are new homes. In contrast, in Quintana Roo and Yucatan, 70% of sales are concentrated in new units, indicating a significant preference for new housing in these regions.
Metropolitan Areas Show Steady Growth
While tourist areas are thriving, metropolitan regions such as Mexico City are experiencing a slower dynamic, with growth rates below the national average.
“The capital gains in Mexico City grew by less than 7%, which is a favorable indicator. Although when compared to tourist markets such as Quintana Roo and Baja California Sur there is a significant difference, in general terms, it is a positive sign of sustained growth,” Becerra said.
Despite the slower price increase, Nuevo León, Jalisco, and the State of Mexico lead the housing market in terms of sales volume. Over 4,000 homes, both new and used, are sold per month in these states, representing nearly 30% of all housing sales nationwide. Following them are Guanajuato, Chihuahua, and Mexico City, each accounting for 5% of housing sales.
“From the perspective of a developer or investor, it is very important to have this information because the panorama must be analyzed in a comprehensive manner. If only the demographic part is taken into account, it could be said that the Mexico City market is more attractive, but it is not necessarily where the most sales are being made today,” Becerra added.
The insights provided by 4S Real Estate underscore the robust demand in tourist areas driving housing prices upward, while metropolitan areas continue to show steady growth. For investors and developers, understanding these regional dynamics is crucial for making informed decisions in Mexico’s diverse real estate market.