Real Estate: Mexico’s Outlook
This sector plays a relevant role in Mexico and has the potential of becoming one of the development levers for the country, new trends are starting to shape the future.
Published on December 16, 2020
Sofia Baxter, Jorge Juárez & Ana Karen Tello
Historically, investments on Real Estate are some of the most profitable when markets are in debt and shares are low. In Mexico, Real Estate represents ~10% of its total GDP, from which housing is accountable for 60%. During 2020, the housing segment has conserved its dynamism and reached high prices compared to other LATAM countries, whereas the offices and commercial sector has experienced excess supply. With the COVID-19 pandemic, Real Estate has faced several challenges driven by unemployment, home office, and the peak of E-commerce.
In the long-term, new trends are expected and joined with high returns on investment may result in an increased attractivity for investors. Regarding the housing segment, a housing deficit, decrease in the population growth rate and a generational factor changing housing requirements will play a significant role for the future. On the other hand, integration of services in one space for buildings that have mixed uses is starting to become visible in Mexico’s metropolitan cities. As the pandemic is successfully handled, opportunities will arise and a change in business models will be necessary to build a winning value proposition within the Real Estate sector.
(PDF Article Only Available in Spanish)
In the long-term, new trends are expected and joined with high returns on investment may result in an increased attractivity for investors. Regarding the housing segment, a housing deficit, decrease in the population growth rate and a generational factor changing housing requirements will play a significant role for the future. On the other hand, integration of services in one space for buildings that have mixed uses is starting to become visible in Mexico’s metropolitan cities. As the pandemic is successfully handled, opportunities will arise and a change in business models will be necessary to build a winning value proposition within the Real Estate sector.
(PDF Article Only Available in Spanish)
Related Insights
The growth potential of emerging economies
Economic power has spinned around countries in Asia and emerging economies, promising to transform them in a few year in the new players of world commerce. The growing economic power of emerging economy countries was driven in the beginning by the intensity of their production processes, together with the low wages paid within their organizations.
Globalization: An interconnected business world
Globalization is the process and strategy of businesses towards their expansion and operation in new markets. Activities abroad are boosted by new strategies and process transformations. The commercial sector and economic entities connectivity present a series of intangible benefits, driving the enterprise business expansion. Here, we will explore the main indicators of an interconnected and globalized world.
Strategies to bolster the Supply Chain
The supply chain includes the strategic and integral process of organizations in the creation of a product, this being comprised of relationships between various entities. The production and profitability of organizations will depend on the level of efficiency of their supply chains. In every sector, the supply chains are the cornerstone of company productivity. However, these have shown to be vulnerable to disruptive events, risking operational continuity.
