Why is Some Playa del Carmen Land Appreciating at 20%?

While excellent low-priced Mexico land opportunities can often be found in the new “rising stars” of the tourism industry – such as Tulum or Campeche – and many buyers feel it is safe to assume that booming tourism will bring higher demand, more services, and consequently price increases, many buyers also assume that in more established markets, it is often more valuable to invest in completed properties since land is expensive, and slower to appreciate.
So, why is it, then, that some Playa del Carmen land has appreciated 20% over the past several years?

There are a number of factors involved, but the following are a few of my own observations, which generally point to the strength of investing in Playa del Carmen real estate.

Healthy, Resilient Real Estate Market

While the real estate market was definitely affected by the 2006 U.S. housing melt down and the subsequent recession, prices did not fluctuate nearly as drastically, and have been recovery steadily, with price reductions becoming less common.  The market has proven to be fairly resilient.

Development of New Potential

The municipal government has made a decisive effort to find new areas of high potential for investment and development.  In addition to the necessary attention on beachfront and near-beachfront developments, the municipality has taken advantage of the fact that even areas further back have close access to the beach, promoting high-quality developments in those areas.  This is, in fact, where the greatest increase in land values has been seen.

Diversifying Economy

A part of this effort has been to diversify Playa del Carmen’s economy, bringing educational institutions, agriculture and even a recycling plant to the city (a reflection of the area’s emphasis on environmental issues.)  This process will make Playa del Carmen’s economy and real estate market even less susceptible to large fluctuations in the world tourism economy.

Strong Tourism

This having been said, the core – and currently only – factor in Playa del Carmen’s economy is tourism.  After the low-point in 2009 when tourism in Mexico virtually came to a halt, Playa del Carmen has recovered momentum; although slowly, it has outdone many other tourist destinations throughout the world.  The strength of the area’s tourism has been the foundation of the resilience in real estate and the possibility for diversification.  Beautiful beaches, close access to one of Mexico’s most traveled international airports, a clean city, friendly atmosphere and a very high level of safety all draw tourists back year after year.

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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