Ride The Mexican Wave Of Property Investment

Overseas property investors looking for a strong rental yield and all year round good weather might want to take advantage of weakness in the Mexican peso following Donald Trump’s presidential victory to snap up a property bargain.

Mexico is one of the top 10 fastest growing property markets across the globe, according to data collected by Knight Frank, with property prices up 8 per cent in the year to June.

The Riviera Maya, stretching between Tulum and Cancun, has seen prices rise by almost a third in the past five years, according to Liszett Torres of Sotheby’s International Realty. The trend has been mirrored in investor demand, with sales up 25 per cent every year for the past three years. The growing interest has fueled several up and coming areas.

Tulum, a Mayan fortress city, has become a bohemian favorite, retaining a low-rise style of development and embracing local rituals. Meanwhile, in ever-popular Playa del Carmen there are two-bedroom beachfront apartments from just $550,000, and has grown from a small town to a booming resort.

50 per cent of buyers on the Riviera are Mexicans purchasing investment properties, according to Torres, whilst foreign buyers are usually seeking second homes. Of this group, American’s make up the largest population. However, direct flights to Cancún from the UK, Germany, Argentina and Canada are expanding the areas appeal to other investors.

The Riviera offers an exciting investment opportunity, with year round good weather reaching a low of 21 degrees in January. This means that homes can offer returns of up to 18 per cent, and this attractive figure, coupled with the low cost of living in the country means it is little wonder it is becoming a hotspot.

In spite of Mexico’s problematic reputation for drug violence, this has not had a negative impact on the Yucatán, largely due to its distance from the cartel turf of northern Mexico. Significant investment in security infrastructure, police training and equipment has also aided this, and the US State Department has no advisories or warnings in place for the Yucatán area, leaving the coastline with a safety record on a par with European capitals.

The weak peso following uncertainty surrounding Donald Trump’s presidential election is already boosting interest in investment properties among those with foreign currency. However, even before the US election, prices for prime homes on the Mayan Riviera (valued above $1m) had been rising about 4 to 5 per cent a year, whilst during the third quarter of 2016, prices in Yucatán had risen 26 per cent over the same period in 2012.