Mexico’s housing market witnessed a significant surge in 2023, registering the second-highest increase globally with a staggering 4.7% rise.
This trend, only eclipsed by the United Arab Emirates’ 10%, paints a concerning picture of affordability in the nation.
According to the International Monetary Fund (IMF), Mexican housing costs have skyrocketed by over 8% compared to the pre-pandemic period. This alarming increase is most evident in cities like Queretaro and Guadalajara, which saw housing prices climb 12% or more.
Housing remains unaffordable amid high interest rates, with prospective buyers facing high borrowing costs and owners reluctant to sell. See our blog post for more on the outlook. https://t.co/L8M7NE7idC pic.twitter.com/9U21dXoaCd
— IMF (@IMFNews) January 17, 2024
In Guadalajara, Mexico’s burgeoning tech hub, acquiring a single square meter of property can cost as much as 43,795 pesos (US$2,5000) in some exclusive residential areas.
This surge in housing costs has been further fueled by a steep increase in rentals across major cities. The trend is partly attributed to rising inflation and the influx of foreign digital nomads choosing Mexico as their new home base.
While skyrocketing housing costs may not pose a major concern for governments in cities like Dubai, where foreigners dominate the population, the same cannot be said for Mexico.
The current price point places home ownership far beyond the reach of many ordinary Mexicans. Local media reports estimate that, at current prices, a typical Mexican worker earning around 13,000 pesos (US$750) per month would require 21 years to repay a mortgage.
The situation could worsen if inflation continues to climb, pushing interest rates even higher. This would make home ownership an even more distant dream for countless Mexicans.