Business Monitor International (BMI) has published its latest report analyzing the Mexico real estate market and the results are impressive to put it mildly. The report features BMI’s market assessment and also includes independent forecasts of major construction projects in the residential and commercial markets, along with rental prices and yields in Mexico’s main cities. The goal is to provide independent forecasts and competitive intelligence on the real estate industry in Mexico.
“Mexico’s strengthening economy has created a more lucrative business environment, which can be expected to generate growth in the near future,” writes BMI. “The current transition towards a more service-based economy is creating opportunities for retail developers across the country while the robust manufacturing sector is [also] supporting growth.”
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Following noticeable progress during 2014, BMI is forecasting economic growth during 2015 of at least 3.7 percent, which will benefit Mexico’s already strong real estate markets. In addition, reforms to the nation’s energy sector, along with a series of changes aimed at rebalancing other aspects of Mexico’s economy are expected to make it less dependent on the U.S. and even more attractive to foreign investment.
Still,Mexico’s close proximity to the U.S. has definitely made the real estate market more attractive, especially in popular vacation destinations like the Riviera Maya, Cancun, Puerto Vallarta and Cabo San Lucas. In fact, Mexico is quickly becoming a favorite destination among retirees and expats from the U.S.,Canada and around the world who are looking for exceptional value luxury and – of course – a fabulous tropical environment to call “home” either part or full time.
“Foreign investors are increasingly demanding premium, high-end space,” writes BMI. “We also believe that in the long-term the services sector will contribute an increasing portion of Mexican GDP, and that there will be considerable potential in terms of providing office space that will serve these industries.”
Of course, Mexico’s steady economic growth in recent years also means there has been a rise in household incomes nationwide, along with a substantial increase in consumer confidence. In turn, the nation’s retail industry has experienced positive growth and a large number of international firms are currently planning to invest and expand throughout Mexico’s many attractive real estate markets.
Finally, rental rates have risen steadily in response to the growing demand, while available spaces are increasingly modern and expansion towards “second tier” cities continues at breakneck speed throughout the country.
It’s also important to note that the International Monetary Fund has forecast that over the next few years around 70 percent of worldwide growth will come from developing countries and emerging economies. This includes Mexico, the Philippines and Saudi Arabia, which are all expected to continue to experience “significant growth” over the next ten years.
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