Fiesta time for property buyers in Mexico

Mexico has become increasingly popular for buyers looking for second homes or those looking to retire. While Cabo has long been a top destination for college students looking for fun during spring break, today more destinations are proving popular for both second homes buyers and those looking for a permanent base. A key trend is the recent surge in demand, which will lead to rising property prices so now is a great time to invest. Strong demand points to a resilient market and with thriving tourism this serves to only make the rental market even stronger. Some forecasts predict that over the next five years Mexico will have an inflation rate of 16.7%. This figure translates to an average yearly increase of 3.3%. This data indicates that Mexico is expected to experience inflation, meaning that now is likely to be a good time to consider buying property. Locations like Mexico City have a strong real estate market, while coastal areas like Playa del Carmen, Tulum and Puerto Vallarta are popular for second homes and tourism. Gated communities offer peace of mind for when homes are left empty for a lock-up-and-leave option and there is a myriad of property designs from traditional hacienda-style Spanish villas to sleek, contemporary accommodation. Playa del Carmen to the east is known for its white sandy beaches and turquoise waters, with a vibrant nightlife and retail therapy centred around Quinta Avenida or ‘Fifth Avenue’. A maze of cycle paths provide a simple and pleasurable area to navigate. Tulum has a spectacular coastline, boasting archaeological Mayan ruins that have become a huge tourist attraction. It is more laid back than some other resorts and has an almost hippy vibe with yoga retreats, dense jungle and nature reserves. Puerto Vallarta on the west coast has a natural charm with beaches backed by the Sierra Madre mountains. This destination has an authenticity of spirit created by its culture, gastronomy and traditions. Whether it’s on an adventure exploring steep rivers in the jungle or a relaxing and pampering trip, Puerto Vallarta has a wide range of activities and experiences waiting for you. As well as a beach destination, this location’s backdrop has colonial architecture as well as Hollywood glamour, adventure and high adrenalin alongside relaxation and pampering – really offering something for everyone. Buying real estate in Mexico offers affordability, a lower cost of living, and a vibrant cultural experience with history in abundance, beautiful beaches and a diverse menu for foodies.

So just what are the pros and cons?

• Affordable prices: Compared to many other countries, especially the United States and Canada, Mexico offers more affordable options, making it particularly attractive for retirees, investors, and people looking for holiday homes or second properties.
• Good climate and varied landscapes: Mexico boasts diverse landscapes ranging from beaches on both coasts (such as the Pacific and Caribbean) to mountainous areas and vibrant cities.
• Proximity: For many North Americans, Mexico is just a short flight away, making access easy to travel back and forth. This proximity is especially appealing to those who want to live in Mexico part-time or retire there while staying close to family and friends.
• Retirement haven: Mexico is a popular retirement destination due to its lower cost of living and high-quality healthcar
• Tax incentives and residency programmes: Mexico offers residency options for foreign buyers, which is especially appealing to retirees and long-term expats. Some regions also provide special tax incentives for property owners and investors.
• Cultural appeal: Mexico is rich in history, culture, and a vibrant local lifestyle. For many homebuyers, the opportunity to immerse themselves in the culture, food, and lifestyle of Mexico is a huge draw
• Investment potential: With a growing economy and areas seeing increasing tourism, some parts of Mexico present good opportunities for real estate investment, whether for vacation rentals or long-term holdings.
• Natural beauty: From beaches to jungles, deserts to mountains, Mexico’s varied landscapes offer breathtaking natural beauty that attracts those looking for a serene, picturesque setting to live in.

Buying new developments or ‘off plan’ is becoming increasingly popular, providing the option for potential customisation of the floorplan and amenities as well as a modern aesthetic. You can also buy in up-and-coming areas offering the potential to increase the property’s value long-term. All these factors, combined with the country’s relatively low cost of living, make Mexico an appealing option for many types of homebuyers. However, there are drawbacks to buying in Mexico. The Mexican government allows foreign ownership, but properties within certain areas are subject to restrictions. These areas are known as the ‘Restricted Zone’, which includes land within 100 kilometres of international borders or within 50 kilometres of the coastline. Foreigners can buy a house in Mexico in the restricted zone but only through a trust fund for 50 years. This trust, known as a ‘fideicomiso’, is managed by a bank, and any decisions you make on the property have to go through the bank. Legalities, bureaucracy and red tape can be hard to deal with – the Mexican process can be drawn out and hard to understand, complicated further by a potential language barrier. Some sellers can be dishonest so it is vital that you do your due diligence and unless you are cash buyers, financing a purchase can have its complications with non-residents having to meet stricter standards. Cultural differences and limitations with infrastructure might make purchasing more challenging while once you own a property, care and maintenance might be hampered by the climate, finding tradespeople you can trust and natural disasters. However, as long as you do your research and take the right advice, buying a property in Mexico will certainly broaden your horizons and maybe ultimately even your bank balance. Whatever route you take, it will certainly be an experience and allow you to make new memories.