Mexico’s housing market is cooling again, with the nationwide house price index rising by a minuscule 0.41% in Q1 2022 from a year earlier, following a y-o-y growth of 2.5% in Q1 2021. On a quarterly basis, house prices were almost unchanged.
The housing market improved gradually in recent years, with real house prices rising by an annual average of 2.75% from 2016 to 2021. For almost a decade before that the Mexican housing market was more or less static.
Many Mexico City residents are selling their homes and moving to outlying areas with more space or reinvesting in other countries, said Hector Romero of Peters & Romero Bienes Raices agency and Andrés Vizcaíno of KW Pedregal Keller Williams, amidst the ongoing pandemic and heightened economic and political uncertainty. This results in increased inventory, keeping house prices down.
Mexico City apartment costs are reasonable at around $3,000 per sq. m. Mexico’s economy grew by 1.8% in Q1 2022 from a year earlier, driven by domestic consumption and a rebound in exports, following y-o-y expansions of 1.1% in Q4 2021, 4.5% in Q3 and 19.9% in Q2.
The economy is expected to expand by a modest 2% this year, after registering growth of 4.8% in 2021 and a huge contraction of 8.2% in 2020, according to the International Monetary Fund (IMF). In May 2022, the central bank Banco de Mexico (Banxico) raised its key rate by 50 basis points to 7%, its eight consecutive rate hike since June 2021.
