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Mexican Real Estate Top Performer in Emerging Markets

Due to political uncertainty north of the border, the last six months have been filled with trepidation in Mexico. The Mexican peso has definitely had a rough time, but one thing has remained steadfast in the turmoil: Mexican real estate. Amongst emerging markets, Mexico is currently performing in the top percentage. Moreover, high demand for properties has created great opportunities for developers and investors alike. 

Building Mexico Real Estate

The World Bank‘s Doing Business survey looked at the ease with which you can build a property in countries throughout Latin America. They considered having to deal with construction permits and registering a property in various countries. Generally, these obstacles are considered fairly small in most Latin American countries, except Brazil and the Southern Cones. However, Mexico was the second easiest country after Colombia. This was achieved due to initiatives such as the digitisation of ‘land records, improving the quality of the Land Registry infrastructure and making the registration process more efficient.’

Mexican Real Estate

Mexican Real Estate Equity

Mexican real estate equity is up by 17.6% in 2017. This represents one of the highest rates in emerging markets worldwide. Mexico’s real estate equity stays relatively inexpensive and offers an attractive dividend. The Mexican real estate market currently ‘boats an 8.65 price-to-earnings ratio and a 6.36% dividend yield.’

Mexican Real Estate Outlook

The future looks bright for the Mexican real estate industry. This is despite the uncertainty that has plagued the country since President Trump’s election. The Trump administration’s protectionist pledges have so far had a minimum impact on the Mexican economy.  Said economy is now generally recovering from any hits taken. Overall, this is a good sign for real estate as this industry tends to gain with the overall health of the economy.

Furthermore, the imbalance currently seen in supply-and-demand for real estate is providing ample opportunity for investors and developers. Mexico’s growing middle-class is putting pressure on this already mismatches supple-and-demand chain. This rapid increase of the middle-class looking to invest in Mexican real estate should provide a welcome boost to the Mexican real estate sector and the Mexican economy.