In Mexico’s dynamic real estate market – or in other words, in Mexico’s chaotic real estate market – it is necessary to have a deep understanding of who homebuyers are and what motivates their decisions. It’s a crucial topic for developers and owners looking to optimize their lead attraction strategies. If you have a large or small real estate company or if you are a real estate broker, this information will surely be useful, either to validate your target or to explore new demographic formulas in your advertising strategies.
In this article I intend to make an exhaustive analysis of the different buyer profiles, along with current search and purchase trends, supported by key data, market indicators and our own experience within the sector.
There is much uncertainty in real estate forecasts. The imminent certainty of a drop in new housing production will generate an inevitable rise in prices. Will developers be ready to take on these challenges proactively through their marketing strategies this and next year?
Demographic and psychographic analysis of the Mexican buyer
However, in order to face these challenges posed by the market trend, it is necessary to level the ground. Strategically speaking and a fundamental exercise in any real estate digital marketing project is the correct knowledge of the market and its players.
Millennials: Innovation and sustainability
– Demographics: Buyers between 25 and 40 years old, mainly young professionals.
– Psychographics: They value technology and sustainability. They seek properties in urban areas that offer convenience, proximity to work and access to amenities such as public transportation and coworking spaces.
– Buying preferences: 60% of millennials prefer to buy in urban areas, and more than 70% are looking for homes that offer sustainable features such as solar panels and water-saving systems.
2. Generation X: Long-term stability and growth
– Demographics: Buyers between 40 and 55 years old, generally with families.
– Psychographics: They focus on financial stability and long-term growth. They seek homes in suburban areas that offer family space and future appreciation.
– Buying preferences: This generation shows a strong interest in properties with ample space, green areas and proximity to schools. Some 65% of buyers in this generation are looking for suburban housing options.
3. Baby Boomers: Convenience and Accessibility
– Demographics: Buyers over 55 years old, mostly retired or close to retirement.
– Psychographics: Priority on convenience and accessibility. They seek properties in communities that offer medical services and recreational activities.
– Buying Preferences: More than 50% of Baby Boomers are looking for single-level or accessibility-improved housing.
Current trends in home search and purchase in Mexico
-The real estate supply in Mexico is as varied as the type of buyers and budgets.
1. Booming metropolitan and peripheral areas
The cities of Mexico City, Monterrey and Guadalajara continue to be the epicenters of real estate demand, driven by their robust economies and ample supply of services. However, in recent years there has been significant interest in peripheral cities such as Querétaro and Mérida. According to AMPI data, Querétaro has seen a 15% increase in housing demand over the last year, standing out as an attractive alternative for those seeking quality of life at more affordable prices.
Distribution of real estate sales by market
In the prime Residential Plus and Luxury housing category, Mexico City continues to be the epicenter of sales with 50% of the total national market.
2. Growth in coastal areas
Cities such as Tulum and Playa del Carmen are experiencing a boom in property purchases, especially by foreign and Mexican investors looking for retirement or investment property. Data from the Mexican Association of Real Estate Professionals (AMPI) indicate a 20% growth in real estate investments in these coastal areas.
3. Flexible spaces and technology in the home
The COVID-19 pandemic has dramatically changed buyer preferences. The need to work from home has led to an increase in demand for homes that offer home office space, as well as a growing interest in smart homes that incorporate technology for security and energy efficiency.
Although the construction sector is one of the main drivers of the national economy, it is also true that it is becoming increasingly difficult for builders to generate more projects. One of the fundamental problems lies in the official regulatory complications and lack of incentive tools for the developer.
All of the above, together with the cost of land, construction and other costs, will result in a contraction of the real estate market, which will translate into less supply and higher prices for the end buyer.
Properties in coastal and retirement areas are in high demand among this group.
Impact of the political situation on Mexico City’s luxury real estate sector
The luxury real estate market in Mexico City, one of the most dynamic and exclusive in the country, is influenced not only by economic factors, but also by the political context. In recent years, the political environment has generated uncertainty among investors and buyers of high-value properties, affecting their purchase decisions.
1. Government regulations and policies
The change of federal administration in 2018 and the arrival of a government with a focus on austerity and regulation of the real estate sector has created an environment of increased scrutiny for luxury investments. Urban control policies and revisions in construction permits have slowed the development of luxury projects, generating caution among developers and investors.
– Effect on the luxury market: These policies have led to a slowdown in the supply of new luxury properties in traditionally exclusive areas such as Polanco, Lomas de Chapultepec and Santa Fe. A recent report by real estate consultant Softec points to a 12% reduction in the construction of luxury projects in Mexico City in the last year.
2. Economic uncertainty linked to political uncertainty
The uncertainty generated by government economic policies, such as proposed tax reforms or changes in foreign investment regulations, has impacted the confidence of luxury property buyers. Fear of new regulations has led to a stagnation in purchasing decisions, with buyers adopting a wait-and-see attitude before making significant investments.
– Stagnant Demand: This climate of uncertainty has led to an increase in the inventory of luxury properties, which has slowed price increases in high-demand areas. The Association of Real Estate Developers (ADI) reports an 8% growth in luxury inventory in 2023, compared to a stabilization in prices.
3. Impact on international perception
The political context has also affected foreign investors’ perception of the luxury market in Mexico City. Although Mexico continues to be an attractive destination for real estate investment, the political climate has introduced a perception of risk that did not exist in previous years, causing some investors to reconsider their plans or diversify their investments to other regions of the country or even to more exotic options across the ocean such as Spain.
I would like to take this opportunity to tell you that if you are interested in an investment through the figure of Spanish Golden Visa we have very good information in a previous article.
Marketing strategies for each buyer profile
1. Segmentation and personalized content
Understanding the motivations and needs of each group is key to designing effective strategies. Developers should focus on creating personalized campaigns that resonate with each profile:
– Millennials: Campaigns that highlight the technology and sustainability of properties, with a focus on urban living.
– Generation X: Content highlighting stability, security and long-term growth opportunities in suburban areas.
– Baby Boomers: Messages that emphasize convenience, accessibility and community.
While each profile is so unique and diverse, even within these groups, it is a fact that the more you exercise micro-segmentation through your advertising messages, the better your understanding of each audience will improve.
2. Use of data and statistics
Using relevant market data, such as price trends and property revaluations, can be a powerful tool to convince undecided buyers. For example, showing how a property has increased in value by 10% in the last 5 years can be a deciding factor for an investor.
A piece of advice that nobody asked me for, but that will surely help you a lot: Take very good care of and curate your data sources as well as the timeliness of them.
Particularly, I have had very good results communicating payment plans or financing options; although I must tell you that this is a technique with which you should be careful because if it is not written correctly you can end up attracting unqualified profiles, which translates into wasted sales efforts.
3. Adoption of technology in the sales process
Technology plays a crucial role in the buying process, especially with the growing preference for digitization. 80% of buyers prefer to start their home search online, using tools such as virtual tours and credit simulations.
The truth is that the Mexican real estate market is constantly evolving, and a thorough understanding of buyer demographics and psychographics is essential to developing winning marketing strategies. Developers, brokers and owners must adapt their approaches to align with current trends and the specific needs of each type of buyer, leveraging technology and market data to maximize their impact and conversion.
The impact of the political context on the luxury real estate sector in Mexico City underscores the importance of being aware of government regulations and policies, which can directly affect supply and demand in this segment.
With a well-informed strategy, you may be able to circumvent these challenges and take advantage of opportunities in a market that, despite the uncertainties, remains one of the most attractive in the region (and boy, do we know it).
If you are interested in these topics or want a personalized advice on how to adapt your real estate marketing strategies I will be happy to assist you, schedule an appointment with our team.
Happy sales.
– Gus.
