Welcome to BuyAssociation.co.uk

Mexico: Mexico

Guide to the Risk and Opportunity Ratings

At the end of each country profile, we have given a risk rating and an opportunity rating. These ratings are a summary of our analysis indicating the levels of risk when investing in a market and the level of opportunity to profit from it.

The ratings themselves are simple. Both work on a scale of one to five. The opportunity rating is indicated by the $ symbol. A single $ equals a low opportunity whilst 5 of them ($ $ $ $ $) equals the highest opportunity ranking.

For risk we have used the * symbol. A ranking of * equals a low risk rating whilst * * * * * equals a high risk rating.

Introduction

Bordering the US, Guatemala and Belize and with coasts on the Pacific Ocean and the Gulf of Mexico, Mexico is an exciting and vibrant nation filled with Latin spirit. From the hectic clutter of Mexico City to the lively coastal resorts of the Yucatan Peninsula, the country offers a wealth of experiences. Mexico has it all – superb beaches, an enviable climate, bucketloads of culture and 10% of the world’s known species – and, in recent years, an increasingly stable and secure environment for foreigners wishing to buy property. The countryside is also extremely varied, from semi-arid desert in the north and volcanic mountains in the centre, to tropical terrain in the south. The remains of the Mayan civilisation add an exciting dimension to the country.

Today’s Mexico is among the fastest-growing industrial powers in the world, with cities boasting 21st Century facilities and an increasingly good transport infrastructure. The country has a free market economy which recently entered the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Mexico has twelve free trade agreements with over 40 countries, putting more than 90% of its trade under such agreements. GDP growth was 3% in 2005, whilst inflation dropped to 4.1%. The next government, due to take over in 2006, will be expected to confront the challenges of boosting economic growth, improving Mexico’s international competitiveness, and reducing poverty.

Property values in Mexico have been growing year by year. In the popular cities and coastal areas prices have risen significantly, but in most parts prices have not increased as quickly as in the US and Europe in recent years. It is still therefore possible to buy property or land at significantly lower prices than in these countries and the popularity of Mexico, with its exotic mix of Mayan and Spanish culture, is likely to increase over the coming years. All this goes a long way to explain the reasons for the growing numbers of American and British investors looking to Mexico to fulfil their requirements.

Is this a good place to buy?

As stated above, property prices in Mexico have risen substantially in recent years, especially near the coast, but with time and patience it is still possible to find good value purchases. It is also possible to find properties with good rental potential – net rental yields of 15% on a basis of 40% occupancy are available in some areas, and coupled with annual property price increases of 10-20%, this adds up to an attractive package. The costs of ongoing ownership, such as maintenance and taxes, are also fairly low, the cost of living in Mexico is around half that of the UK or USA, and labour costs are low, so those wishing to live in Mexico will also find benefits.

Mexican law on property ownership is comprehensive, and provides protection for both the seller and buyer in all property transactions – as long as the law is followed, correct procedures adhered to and all necessary documentation completed. Most real estate brokers and developers in Mexico are honest and above board. The notary public plays a major part in all property transactions in Mexico, and ensures the legality of the entire process. After buying, it is virtually impossible for titles and properties to be interfered with officially without a legitimate reason. Property purchasing in Mexico is, therefore, an extremely secure process. The market is relatively stable, with moderate annual inflation, meaning that the peaks and troughs of markets such as the UK are unlikely.

Price history

Prices vary significantly across Mexico, and the wisdom of property purchases here depend heavily on location. In key areas such as the Yucatan Peninsula, near Cancun, property values have risen significantly, whereas other less popular areas will not have seen such growth. As a basic guide, a good two-bedroom apartment in a popular area should cost between £80,000 and £140,000 ($136,000-$240,000) depending on size, location and facilities. Three-bed homes are typically upward of £180,000, and at the top end, ocean view villas can sell for several million US dollars or more. Property can be found for as little as £15,000 ($25,000), but average prices are much higher.

More pages

Page 1: Guide to the Risk and Opportunity Ratings
Page 2: Which type of property should you go for?
Page 3: Key risks and opportunities

Reserve your overseas currency online - for a high street beating rate!

Find your perfect villa rental with Villas4You over 500 villas across 20 destinations

Calculate how much you can earn - rent out your holiday home here

Holiday home insurance from intasure - Click Here UK insurance for your property overseas