Mexico has become an attractive destination for foreign investors in the real estate market. From the main capitals of the country such as Mexico City, Monterrey and Guadalajara, to those less known such as Zihuatanejo, Puerto Vallarta and Tulum; Mexico offers a wide range of opportunities to acquire diverse properties with qualities that make them unique. However, purchasing real estate in Mexico as a foreigner comes with certain requirements and legal considerations. Can a foreigner really buy a home in Mexico? Find out below some of the most relevant trends currently relevant to buying property in Mexico as a foreigner.
Real estate market trends for foreigners in 2024
The real estate industry in Mexico has undergone a significant transformation in recent years, marked by the adoption of technology, the evolution of domestic and foreign buyers’ preferences, as well as the decentralization of investment at a global level. For this new 2024, the real estate industry is heading towards a new future, influenced by several trends that outline the direction of this key sector in the Mexican economy. Cities in northern, central and southeastern Mexico have experienced significant development, offering opportunities for investment in both tourist and non-tourist properties. Annual rates of return in excess of 6% continue to attract the attention of international investors.
- Digitalization for the purchase and management of properties
The integration of applications and digital platforms in daily life for buying, selling and leasing properties is revolutionizing real estate transactions in Mexico. In this context, Nolab has launched several tools specialized in the luxury sector in Mexico, and recently in Spain.
- Decentralization of foreign investment through Nearshoring
For a long time, major industries based in European countries and the United States have opted to set up operations in countries where labor costs are much cheaper, such as China or India. However, companies such as Samsung, Tesla and BMW have relied on Mexico to establish production chains in Mexico through nearshoring. Cities considered logistics and industrial enclaves are experiencing an increase in demand for properties, providing growth opportunities for real estate brokers operating in these areas.
- Incursion of millennials in the purchase of properties
During 2023, the so-called millennial generation has stood out as one of the population segments with the highest real estate purchase activity. This audience has shown particular interest in smaller, more affordable housing in urban areas, preferring to transact digitally. Those with a strong digital presence will be able to efficiently take advantage of this trend, adapting to the preferences of this generation.
What has been the impact of the pandemic on the real estate market in Mexico?
Undoubtedly the past COVID-19 pandemic left a mark on the real estate market, however, the real estate industry in Mexico has shown resilience by digitizing many processes and providing better buying options for those looking for a property as an investment or to live in.
Likewise, the demand for properties has evolved in characteristics, with a greater appreciation for larger spaces, with abundant natural light and with natural elements predominating, in addition, the adaptation to remote work has influenced the choice of locations, with areas outside the main cities gaining popularity.
The trend highlights that the reduction of space and operating expenses during the global crisis led to a reconsideration of the efficient use of office space. In this context, many industries and companies have found a balance between employee preferences, growth objectives and the operating expenses involved. With an increase in home office work, many foreigners have found a paradise to work and live new experiences, in this context, neighborhoods such as Roma, Condesa and Polanco in CDMX have been the preferred scenario for most of these digital nomads.
How can a foreigner buy a property in Mexico?
Buying property in Mexico is an attractive and safe option for foreigners, as the country offers a safe path for international investors. While there is still no magic formula for the perfect investment, there are several key factors that can influence making a smart purchase. Here are some tips for a successful real estate investment in Mexico:
- Professional Advice: Although the process is not complex, it is highly recommended to have the advice of experts in Cross Border real estate transactions. Contact us and get free professional advice.
- Market Knowledge: Conducting thorough research on the area and the real estate market is crucial. Indicators such as price, foreign buyer participation, rental price increases in recent years, property demand and the nature of growth in the area are key elements to consider. Understanding the investment potential and the direction of the market will contribute to making informed decisions.
- Consideration of Restricted Zones: Since there are restricted zones for the acquisition of property by foreigners, it is essential to understand these limitations and explore options such as bank trusts or Mexican corporations. For example, according to the Calvo Clause, foreigners are prohibited from acquiring parcels or ejido land, as well as any property located in the restricted zone. This area covers a 100 km strip along Mexico’s borders and 50 km wide with respect to the coasts and beaches. However, there are legal mechanisms for you as a foreigner to acquire property on Mexico’s coasts.
Top 5 unique projects to invest in Mexico City
Among the numerous options available to foreign investors, some notable projects include real estate developments in consolidated tourist cities, residential properties in growing areas and participation in real estate trusts backed by reliable banks such as BBVA or Banco Inmobiliario Mexicano (BIM).
Loma de la Palma I
Loma de la Palma I is presented as an oasis of luxury in the middle of the forest, strategically located near important access roads such as Reforma, Periférico and Constituyentes. On more than 55,000 square meters, a safe haven has been created that offers tranquility and exclusivity. With peripheral vehicular access and a design that integrates harmoniously with the wooded landscape, the development provides peace in the midst of bustling Mexico City. Inspired by a glamorous camping lifestyle, it features an artificial lake of more than 6,000 square meters and extensive green areas, giving residents the experience of living in a luxury resort. With first-class amenities, from event rooms, terraces and coworking spaces to a gourmet area and various family entertainment options, such as a cinema and virtual simulator, Cero 5 Cien promotes wellness with facilities such as spa, gyms, beauty salons, and three swimming pools, among others. The spaciousness of its apartments, which range from 393 m2 to 1030 m2, allows each owner to customize their home according to their tastes and preferences.
Santa Fe Reserve
Located just 15 minutes from Santa Fe, Mexico City, Reserva Santa Fe stands as an avant-garde real estate project that redefines the relationship between humanity and nature. Offering more than 25 km of pedestrian trails, it offers residents the opportunity to enjoy nature through a variety of activities, from hiking and biking to sports and recreational amenities. The project proposes a return to the essential, where architecture redefines luxury and the environment offers an oasis of serenity just minutes from the urban bustle of Santa Fe through sustainable vertical and horizontal villas.
Horacio II, Polanco
Avenue Polanco is an outstanding option for foreign investors looking for properties in Mexico City that not only meet their immediate needs, but also protect their investment in the long term. Located in the exclusive area of Polanco, this area is distinguished by its multicultural architectural development and strategic location. Horacio II, an impressive real estate development in the heart of this prestigious area, offers an unparalleled quality of life and significant capital appreciation. Bordered by Horacio, Homero, Jaime Balmes and José Luis Lagrange streets, Polanco offers easy access to luxury shopping centers, offices, business centers, parks, gyms and a wide range of restaurants.
In summary, although acquiring property in Mexico as a foreigner has certain requirements and considerations, the market remains attractive with promising investment opportunities. With the right information and an informed approach, foreigners can make successful investments in Mexican real estate.
