Homes on the beach and northern border areas are preferred for acquiring vacation property, Newmark says.
Beach, colonial, or nature-contact vacation destinations have become popular for people seeking to acquire a second residence, due to the pandemic situation that has been experienced for more than a year and the flexibility of work, explains the Newmark real estate company.
“As a result of the health situation, sales of vacation homes have increased in a disruptive and contrasting way to the conditions that prevail in most sectors and industries of the world economy,” said the company.
The companies that have made these purchases are those who have remained economically stable despite the pandemic and their solvency allows them to invest in additional assets.
The purchase of a house, seen as a more solid investment in the face of the uncertainty of the development of the pandemic, has also pushed the decision.
“Real estate advisory agencies that refer to the purchase operation as an investment that can generate returns by incorporating it into lodging operation schemes such as the platforms that exist in the market today, have been points that have driven the acquisition of second homes or vacation ”, explained Pedro Delgado Beltrán, director of Hospitality for Newmark Mexico and Latin America.
The results of the housing units during the first quarter of 2021 point to a similar path. Homex, Javer, Cadu and Ara reported having sold fewer units, but at a higher price.
In the particular case of the Cadu home, for example, there was a 10.6% increase in total income due to the higher cost of the homes sold, which were located in Tulum and Cancun, reported to the Mexican Stock Exchange. Both destinations contributed 381 million pesos to the final result.
Some in the market for a second home are looking south of the U.S. border; Mexico is seeing growth in the second home market as travel restrictions ease and more people get vaccinated.
In La Paz saw a 33% increase since June 2020, according to broker Victor Granados. “Clients who wanted to wait a year or two are doing it now,” he said of buyers.
There’s an urgency among the buyers, experts note. “I was surprised by the number of people who are looking for beachfront property,” said Laura Zapata, a real estate agent in the Puerto Morelos area. “Maybe being in a lockdown they are saying, ‘I’ve gotta do this, and I’ve got to do it now so I can enjoy my life.’ ”
In addition to beach towns like Mazatlan, Puerto Morelos, La Paz, Puerto Vallarta, San Jose del Cabo, Tulum, and Playa del Carmen, many foreigners choose to purchase second homes in Colonial-era cities like Queretaro and Merida.
Be prepared to deal in cash
Mexico is “almost strictly a cash market. There is virtually no financing for foreigners,” San Miguel De Allende agent Ximena Domínguez said.
While financing is an option as a last resort, associate broker Bryan Townsend warned it will cost you more in the long run. “You could be looking at an extra 6.5 to 13% interest on a mortgage,” he said.
Yes, there’s escrow and title insurance
While not required, Granados, Domínguez and Townsend all recommended using the account to securely hold your deposit.
Please, work with an AMPI agent
Agents ensure your financial and legal security. Granados, who’s been in the sales market for 15 years, always tells his clients “it’s the same as in the [United States].”
What is AMPI?
AMPI is Real Estate association with more than 80 Sections throughout the country, committed for 63 years to the development of real estate activity in Mexico, framed by a code of ethics, for the benefit of Real Estate Professionals of the general public. groups together individuals engaged in real estate activities such as: Administrators, Marketers, Mediators, Appraisers, Promoters, Financing Advisors and Consultants.
Source: obras.expansion.mx, marketwatch.com, liveandinvestoverseas.com