Home Headlines Real estate sector in Mexico forsees slow growth in 2019

Real estate sector in Mexico forsees slow growth in 2019

by Yucatan Times
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2019 begins and several factors, including the change of government, positions the real estate sector in the country with a slow growth forecast for the next 12 months. Developers, investors and future buyers should pay attention to a series of different factors.

Pablo Vázquez Rodríguez, president of the Mexican Association of Real Estate Professionals (AMPI), mentioned that by 2019 the real estate sector estimates a growth between 5.25% and 6.0%. He explained that this estimate is conservative because every time a new sexennium begins in Mexico, the real estate activity usually slows down.

He also said that Mexico has the potential to maintain a growth rate because the demand for housing is high and it has a mortgage portfolio of 6.0% (one of the lowest in the world). Indicators that position the country in an optimistic scenario.

Samuel Vázquez, expert economist at BBVA Bancomer, mentioned that the institution estimates an increase of 10 or 15 basis points in mortgage rates.

“Remember that mortgage loans are more affected by long-term expectations than by the reference rate, which is more focused on short-term loans, for example, consumer loans,” he said.

Leonardo González, Real Estate analyst at Propiedades.com, forecasts long-term mortgage rates, of around 10 percent.

Velázquez Rodríguez from AMPI, explained that this year the demand in the residential segment will be stronger, followed by the rent, luxury developments, vacations, hotels and offices. He stressed that the Mexican states with the highest housing demand will be Nuevo León, the State of Mexico, Jalisco, Mexico City and Chihuahua.

Leonardo González, real estate analyst at Propiedades.com stated: “The most liquid housing segments such as Residential, Residential Plus or Residential Premium will have a greater chance to close new transactions in the country.”

In this sense, the analyst of the real estate portal clarified that Mexico City will capitalize these benefits in areas that offer more inventory, have robust indicators of expected returns and habitability trends, especially in emergent or transitional areas such as Escandón, Portales, San Jerónimo, Narvarte or the Insurgentes Sur corridor.

The Housing Fund of ISSSTE (Fovissste) announced in a statement that the budget savings contemplated in its new work plan is equivalent to 100 million pesos, an amount that will be used to finance new mortgage credit schemes (especially co-financing).

The agency also mentioned that it will make an improvement in the current credits.

On the other hand, the Secretariat of Agrarian, Territorial and Urban Development (Sedatu) announced that it will allocate 400 million pesos for subsidies that are granted accompanied by mortgage loans through the Institute of the National Fund for Housing for Workers (Infonavit).

This amount will be distributed among workers with incomes up to 2.8 UMA (Unit of Measurement and Update), that is, a salary of $6,860.70 pesos per month.

While moving the majority of federal agencies to different states throughout the country, according to the National Plan 2018-2024 of President Andrés Manuel López Obrador, will take time, the first changes will begin to take place during 2019.

In December 2018, Josefa González Blanco Ortiz Mena, head of the Ministry of Environment and Natural Resources (Semarnat), was the first State Secretary to move to the corresponding venue, in this case Mérida, Yucatán.

The plan mentions that decentralization will be financed through the co-participation of the private sector through Trusts for Investment in Real Estate (Fibras).

The president also promised to build housing in the states through the Housing Fund of ISSSTE (Fovissste), grant loans and benefits to state workers.

TYT Newsroom with information from publimetro.com.mx

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