Investment in luxury real estate in Mexico has experienced significant growth in recent years, and much of this momentum is due to foreign direct investment (FDI). Foreign investors have discovered in the Mexican luxury real estate market an attractive place to channel their capital. In this article, we explore how foreign direct investment has contributed to the development and commercialization of luxury real estate projects in Mexico.
What is Foreign Direct Investment (FDI)?
Foreign Direct Investment (FDI) is a form of cross-border investment in which a person establishes a lasting interest and a significant degree of influence over an enterprise or project located in another country. The following are some of the most representative foreign direct investments in Mexico in recent years:
- Electric car and battery manufacturer Tesla has decided to build a new electric vehicle factory in Mexico.
- Japanese giant Toyota is expanding production capacity at its existing automobile plant in Guanajuato, Mexico. Automobile production in the national territory is expected to reach up to 320 thousand units in 2023 alone.
- During the past year, President Andrés Manuel López Obrador met with Samsung’s CEO, Sungan Choi, to increase investment in the Korean company’s existing plants in Mexico by up to US$500 million.
How FDI drives the commercialization and development of luxury real estate projects in Mexico
In the context of the luxury real estate market in Mexico, this translates into foreign investors acquiring luxury properties or participating in high-end property development projects in the country.
- Increased demand for luxury properties in the country’s main capitals: FDI has led to a notable increase in the demand for luxury properties in Mexico. Foreign investors are looking to acquire exclusive properties in desirable locations, which has spurred the creation of high-end real estate projects to meet this demand.
- Improving national infrastructure to provide better experiences and greater security: FDI has also contributed to the improvement of Mexico’s infrastructure. Foreign investors often invest in the construction of roads, airports and other transportation infrastructure that make property locations more accessible and attractive to luxury buyers.
- Job creation from the development of new real estate projects: One of the most notable impacts of FDI is the development of new luxury real estate projects throughout Mexico. These projects include high-end resorts, luxury condominiums, and exclusive residential developments. Foreign direct investment increases the availability of these properties and makes them more affordable for luxury buyers.
How to choose the perfect luxury property in Mexico for Foreign Direct Investment?
In order to choose the ideal luxury property in Mexico for foreign direct investment, very important considerations are necessary; for example, investors must evaluate the location of the project, whether they wish to purchase or invest in the development, as well as the reputation of the developer and the potential returns on investment in the medium and long term. In addition, it is crucial to understand the regulations and restrictions related to foreign ownership in Mexico.
Cross Border Real Estate Investment: benefits you should know about in 2023
Foreign direct investment plays a key role in Mexico’s booming luxury real estate market. Through increased demand, improved infrastructure and the development of new projects, FDI has made Mexico an attractive destination for investors and buyers of high-end properties in some of the country’s best destinations. However, it is important for foreign investors to research carefully before making investment decisions and to be aware of changing regulations in the Mexican real estate market.
This is why Nolab has developed a 360° accompaniment service during the entire process of buying a property in Mexico, Spain and the USA; from the scouting of the property to the closing and subsequent management. Contact us and find out how to start buying property in Mexico as a foreigner.
