The Mexico real estate market is influenced to a great extent from its norther neighbors.  Given the fact that nearly 80% of Mexico’s exports are heading towards the United States, and another large percentage for Canada, the relation between the economies is quite extensive and influences are high for all of the industries in the Mexican market.  With the obstacles and the slowdowns faced by the economies of these two northern countries, it is thus logical that the bearish forces have also extendeded into the Mexico real estate market and has had its drag on the other Mexican industries. 

A large amount of Americans have been contributing to retirement funds for over 30 and 40 years.  They also have been using these funds in plans to purchase their retirement home or their second home for vacations.  Places such as Florida, Arizona, Texas have received a large amount of such capital flow.  The Mexico real estate market has also been receiving some of these investments in regions such as Baja California, Quintana Roo, Pacific areas.  It is estimated that just over one million north Americans now live in the Mexico real estate region on a year round residency.   The majority of these retired.   With the losses in the financial markets during 2008 – 2009 several families who were planning to purchase their second homes in Mexico were suddenly needing to reassess their plans.  During the latter end of 2009 the market began showing signs of recovery.  This upturn, although very positive, may still not have recovered the overall investor’s confidence as they have responded cautiously in regards to purchases and investments into the Mexico real estate market when compared to previous years figures.

2009 also saw a couple of spurts of exchange rate adjustments which created windows of opportunities for buyers.  The Canadian Dollar recovered ground and reached par with the US Dollar on several periods during 2009.  With this increase in the purchasing power and several decreases in the Mexico home values, Canadians were a segment of the market that remained quietly busy in these periods.

Mexico has also been witnessing a underlying growth in demand in the Mexico real estate from their large lower income and middle lower income families.  There has been massive growth of the government financing for these buyers.  In previous years approximately 150,000 units were constructed on an annual basis but in 2008 and 2009 figures have reached 500,000 annually.  The boom in this area comes from the house loan grants that were averaging nearly 350,000 per year in 2000 to today’s figure of 750,000 loans granted in 2009.  The existing growth of loans is spurred from the large population of young people that live in Mexico which will be needing housing for the next decade. 

The Mexico real estate region, will remain and become the most popular non-American / non-Canadian retirement and second home destination.  Although this south of the border real estate market was impacted downwardly during this past year, as was the case for the majority of the world wide market, 2009 had become a tremendous period of opportunities in the Mexican market.  The beginning semester of 2010 might also continue with some pocket below market windows, before the trend begins it`s upward slope.  Upward pressures will come from different factors all at different influences such as favorable exchange rate variances and the population booms.  This year will definitely be the first of a decade of interesting growth patterns in different segments of the Mexico real estate market.  2010 is not a question of waiting to buy, the important question is if you have the capital…. to buy and wait.

Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. In the summer of 2009, he received the first federally applied Mexico Real Estate Degree and Mexico Professional Real Estate License S.E.P. #5978657. He is the current president of TOPmexicorealestate, you can contact him at (512) 879-6546 or through the company’s web site www.TOPmexicorealestate.com NETWORK

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