Real estate investment is one of the most lucrative and secure investment opportunities. Especially in areas where tourism is a driving force for the economy. I have always outlined in my past 15 years of consulting and writing articles, pointing out to keep an eye on Big Money investments in your market of interest (Government infrastructure investments, Hotels investments if your region are tourist destinations and entertainment parks).
Quintana Roo, Yucatan and Campeche, three Mexican states located in the Yucatan Peninsula. Which have been experiencing a significant increase in real estate appreciation impulses since the announcement of the new Mayan Train and its progress.
Why is the Mayan Train Relevant to the Real Estate Market?
Tren Maya is a visionary project that aims to boost the economy and tourism in the Yucatan Peninsula by connecting major cities and tourist destinations through a 1500-kilometer railway line. This mega-project is expected to increase tourism significantly, which, in turn, will have a positive impact on the real estate industry. What is interesting, is the train increases interest in tourism and therefore the investments to market places much further from the Cancun Airport.
For example, most tourist and adventure seekers journey near to Cancun, Playa del Carmen. Venturing to further beautiful destinations such as Tulum and further south along the Mexican Caribean has been avoided because of the difficulties of logistics and expense to venture further. The Mayan Train infrastructure project changes these parameters. The project is set to be completed in 2023, and since its announcement, real estate investors from USA, Canada and even more from Mexico have been flocking to Quintana Roo, Yucatan and Campeche to capitalize on the expected growth.
As a result of this influx of investors, the real estate market in Yucatan and Quintana Roo experienced a substantial increase in property prices. Particularly in areas that will benefit from the Mayan Train project. This increase in property prices has also led to a rise in real estate capital gains, making Yucatan and Quintana Roo one of the most lucrative real estate investment destinations in Mexico.
Real Estate Capital Gains Increase by Tren Maya in Quintana Roo
Quintana Roo is one of the most popular tourist destinations in Mexico, attracting millions of visitors every year. This beautiful state is popular for its stunning beaches, crystal-clear waters, and vibrant nightlife. But what many people don’t know is that Quintana Roo is also a great place to invest in real estate. In fact, the real estate market in Quintana Roo is experiencing a significant increase in capital gains, thanks in part to the Tren Maya project.
According to the National Council of Directors of the Mexican Association of Real Estate Professionals (AMPI); Quintana Roo’s real estate market in 2020 was at an average annual capital gain of 8.11%, compared to the national average of 5.5%. This increase can be attributed to several factors. Mainly the Mayan Train project, which is already driving up real estate prices in the region.
Moreover, the first quarter of 2023 has shown similar figures when it comes to capital gains in Quintana Roo. Ignacio Lacunza Magaña, president of the AMPI said that we must acknowledge the following. The escalation in the value of concrete and steel did not bear an impact on the surge of the real estate realm. Nevertheless, diverse initiatives have elicited a rise in the proceeds of 5% to 8%. Some of which, the Nichupté Bridge; the revamp of Boulevard Luis Donaldo Colosio,the Mayan Train, and the Tulum international airport.
The Impact of Tren Maya on Mexican Real Estate Market
One of the most significant effects of Tren Maya on Yucatan real estate market is the increase in demand for properties located near the railway system’s stations. The Tren Maya will create new business opportunities and attract more tourists, driving up property values in the surrounding areas. Additionally, the project will make it easier for people to commute. Thus, increasing the number of people looking for properties to rent or buy.
One of the most significant benefits of investing in Playa del Carmen Real Estate or Tulum Real Estate is the increase in capital gains. With the Tren Maya project, property values in the region will undoubtedly continue rising. Making it an attractive investment opportunity for anyone looking to generate a return on their investment.
In Mexico, capital gains tax is calculated at a rate of 25% on the profits generated from the sale of a property. However, the Mexican government has implemented special policies. Allowing exemptions on the capital gains tax on properties sold in designated tourist zones, including Yucatan. These policies make it easier for investors to generate investment returns without worrying about hefty tax bills.
Investing in Mexican Real Estate Strategies
Investing in Cancun real estate or Tulum Beachfront properties is a very smart decision for several reasons.
First, the region has a booming tourism industry that shows no signs of slowing down. Second, the Mayan Train project will bring significant economic benefits to the region. Including increased real estate prices and higher rental yields. Third, Quintana Roo’s real estate market is experiencing a significant appreciation gains. Which means that investing in property now can be a lucrative long-term investment.
Now pay close attention to our following observation. We have noticed a trend that you must analyze when buying in this region. Five years ago, many American and Canadian buyers would wait until a year before retiring. Until then they began investing and buying their retirement or winter home.
However, in today’s marketplace, things are unfolding a little differently. Factors such as unprecedented inflation rates, the cost of materials, and direct labor have caused properties to increase faster than usual. But other factors weigh in on the pricing. Such as this huge government investment into regional infrastructure, the demand for land and properties has also been growing. Thus, these two factors are pushing the value of real estate.
Therefore, if you plan to retire in 3 or 5 years and search for properties then. The panorama will be a more significant price per square foot versus today’s average pricing.
Conclusion
The Mayan Train project is a significant development will transform the Yucatan Peninsula economy and the real estate market. Particularly of areas such as; Cancun, Tulum, Playa del Carmen, Campeche, Merida and Chetumal . With an increase in demand for properties near the railway system’s stations, property values are prone to rise. Making it an attractive investment opportunity for anyone looking to generate a return on their investment.
Investing in Mexico homes for sale is a smart decision. Mainly for those looking for a long-term investment with potential for high returns. Besides, with inflation and healthy infrastructure projects increasing the value of the land. Not only could you find a good hedge against world wide inflation, but also invest into a region of Mexico with very strong added growth potential.
