For many industry pundits these days, Mexico is a nation in waiting, speculators holding off to see just how big an impact the US credit crisis will have on the country’s tourist trade and property economic sectors, a hefty portion of which, have historically been bolstered by big bucks from the Land of the Free. For others, the country remains the affordable paradise it always was, its popularity as a holiday property/retiree destination unlikely to dwindle, strong domestic demand for housing, good economic growth that has lifted millions into the consuming classes and the steady stream of Snowbirds and second-home owners keeping the property in Mexico market in rude health. A doubling of airlift including direct flights from London to Cancun, has also given a fillip to Mexico property sales, with over 10 million tourists in the first half of 2007, a nine per cent increase on 2006. Long-haul investor numbers, are creeping up too, thanks to ‘under value’ real estate and a ‘familiar’ European notary based buying process, although foreigners, as yet, are still unable to buy land in Mexico within 100 kilometres of any international border or 50 kiolmetres from the coastline without first setting up a trust or fidecomiso.
The country’s size and lack of accurate data, however, does bring to the fore the practical difficulties in assessing the Mexico property market as Caroline Hollingworth of Hollingworth Associates explains: “Mexico is so huge and the Mexico property market is very localised in some areas. That said, locations like Cancun, Acapulco and Baja California have boomed in recent years and remain inexpensive compared to US/European equivalents.” Adds market analyst James Gonzalez of Obelisk International: “At present, there’s a limited supply of quality residential units struggling to meet with both domestic and foreign demand. This has pushed up rental yields - property in Mexico City for example, is averaging seven per cent but can be as high as 15 per cent for larger properties in Mexico City. Head to Baja California on the Pacific Coast and a 150 square metre villa will rent for £400 a month, considerably more on the Caribbean Coast-Yucatan Peninsula where property in Yucatan Peninsula typically sells for £120,000 and rent for £1,000 a month.” As to the future: “In dollar terms, Mexico is still relatively good value for UK property buyers,” advises Paul McMullen of Escapes 2. “Even when the dollar rebounds, investors are still likely to end up with a land and a currency exchange gain-not to mention a nice place in the sun.”
Acapulco
The “Pearl of the Mexican Pacific”, this fabled city resort tucked away in the south-west state of Guerrero, is seeing a new wave of prosperity thanks to exclusive land developments and a boom in high-end second-homes helping to draw the glitterati back to the city’s tropical shores. “If you’re looking for prestige-then Acapulco certainly delivers,” explains Eric Gilly of Mexico Propertynvest. “Budgets of £1 million plus are common currency, considerably more for prime oceanfront locations.” Top of the property pile are Puerto Marques Bay with its Miami-style condominiums in Diamond Point and the vintage modernist villas of Las Brisas at the Bay’s southern tip.
Those with the cash to splash invariably choose to live in one of the gated residential communities, which offer bespoke living with glitzy prices to match. One of a portfolio of top-of-the-line properties on the books of Ron Lavender and Asociados is an architect designed waterfront mansion located in the prestigious district of Las Playas. Set in tropical landscaped gardens and boasting magnificent views of Acapulco Bay: fresh and salt water pools, private dock and ocean access are just a few of the exterior trimmings that go with this £2.5 million six-bed property in Las Playas, while inside; Italian marble flooring, ‘smart-home’ media and security systems and a separate two-bedroom guesthouse complete the live-it-large picture.
Baya de Banderas-Puerto Vallarta
Located on the Pacific Coast, 400 miles northwest of Acapulco, the palm-fringed resort of Puerto Vallarta first appeared as a dot on the map in 1918. Then Elizabeth Taylor and Richard Burton dropped by and the place has been bursting at the seams ever since. Cradled in the arms of one of the hemisphere’s biggest and deepest bays, Bahia de Banderas, with 100 miles of beaches and coves, down town is lively but by no means one-dimensional-the neighbourhood of Los Muertos, for one, a classic blend of assets like cobblestone streets and cappuccino bars contrasting with the glittering Malecon, northern PV’s dazzling oceanfront promenade. Property prices in recent years have appreciated faster here than property in Acapulco, oceanfront properties now costing in excess of £500,000, although those seeking low-key tranquillity can head along the coast to any number of beachfront cottages and cabanas in quaint towns like Sayulita or Chamela.
A stylish turnkey investment currently being marketed through Mexico Propertynvest is Terrazas Amapas, a boutique development of just seven luxury condominiums with spectacular bay views. Each floor at the resort has just one two-bedroom unit, ranging from 173 to 258 square metres. Terraces run along the entire front of the residences, with ‘loft style’ interiors including floor to ceiling glass and ‘keyed’ elevators for privacy. Two-bed, two-bath units start from £200,000. Just five minutes from downtown Puerto Vallarta meanwhile, in the prestigious Upper Conchas Chinas, an unusual fractional investment alternative has been launched by the Sandcastles Group. Las Pergolas’s Mexican Pacific architecture blends with sophisticated interior designs including Indonesian furnishings, teak wood trim and gourmet-outfitted kitchen with an outdoor infinity pool and 10-person Jacuzzi. Ownership of a five-bed villa based on 1/10 (5-weeks per year use) deeded share, with a full staff and use of a luxury vehicle is £300,000. Annual maintenance fees cost £4,000. Owners also have the option of placing their allotted weeks into a managed rental pool with net returns averaging £2,000 per week.
Yucatan Peninsula-Cancun and Campeche
Mexico’s calling card to the world, Cancun on the southeast Yucatan Peninsula showcases both the country’s breathtaking topography and the depth of its 1,000-year history. An island community connected to the mainland by two bridges, one of its key selling points is easy access to traditional locations like Isla Mujeres and the hip coastal zone of Riviera Maya. Good stomping ground for first-time property buyers, with direct flights now operating from the UK, entry-level prices for a lock-up-and-leave bolthole remain excellent value, a two-bed unit within walking distance of the beach selling for £100,000. Located within Puerto Cancun, with a sea frontage of over a mile, Novo Cancun is the area’s latest headline resort aimed at active second-homers. Set in over 160 acres, with 51,000 square metres of green landscape, on-site amenities include a spa and gym and sports zone together with an 18-hole championship golf course designed by British Open winner, Tom Weiskopf. Options for this property in Cancun range from two and three-bedroom apartments and four-bedroom duplex penthouses located in the Boreal Towers, with luxury two-storey villas fronting the marina. Two-bed units with Escapes 2 start from £248,570 rising to £745,180 for a marina villa.
A razzmatazz-free alternative located on the quieter side of the peninsula is the £250 million mega-resort of Campeche Playa. Covering a 400-mile stretch of Greenfield coastline just south of the historic UNSECO World Heritage city of Campeche, this 308-hectare site, due to complete in 2010, will comprise 3,000 two and three-bedroom apartments and townhouses together with a marina and Jack Nicklaus Signature golf course. “The project has had full backing from the government since its inception,” explains Kate Bermon of selling agents Pure International. “It heralds a new era of eco tourism on an underdeveloped coastline.” Family friendly attractions include a wildlife centre, marina and water sports facilities, with a rental pool offering annual returns in the region of 8 per cent. property in Campeche prices start from £146,000 for a two-bed unit rising to £347,000 for a three-bed townhouse. Included within the buying price is a ten-year golf membership and five-year marina membership.
Baja California
Attached to the US and separated from all but a sliver of Mexico by the Sea of Cortez (Gulf of California), Baja lays claim to a striking blend of Mexican and US influences: hot desert and cool ocean, manicured golf greens and craggy mountains. Rising prices of property in Cancun and Acapulco property of late, have drawn bargain hunters to the region, Los Cabos at the southern tip of the Baja California peninsula, now firmly on the expat radar with its high-end mix of leisure and pleasure amenities. Set to put the region firmly on the investor map is the landmark resort of Loreto Bay. Tucked in the shadow of the Sierra de la Giganta mountain range near the fishing village of Loreto, some 3,237 hectares of land will be given over to 6,000 community-style retirement and holiday homes.
In the nouveau tradition of eco-urbanism, residents can travel about on foot, by bicycle or in electric-powered golf buggies, with solar-heated hot water, a seawater desalination plant and wind-farm also in the pipeline. Custom-designed properties start from £750,000, one-bedroom casitas from £200,000.
Fighting shy, until now, from the building boom and with property prices a good third less expensive than neighbouring resorts, one up-and-coming area worth investigating, is Mazatlan. “The surge in property prices in neighbouring areas such as Cabo San Lucas and Puerto Vallarta started to spill over into property in Mazatlan in 2005,” explains Hollingworth, “with the pace picking up considerably last year as more projects got under way. Now the area is really starting to embark on the same growth curve, with prices of property in Mazatlan currently averaging 15 per cent growth per annum.” One of a handful of residential projects underway is The Golden Palm, a luxury, high-rise community of 183 dwellings located in the luxury ‘Zona Dorada’ boasting sensational views over the Pacific and ‘Las Tres Islas’-The Three Islands. Boasting an Olympic-sized swimming pool, fitness centre, oceanfront spa and on-site property management services, two-bed apartments with Hollingworth and Associates start from £300,000.
First published in December 2008.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
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