Past, Present & Future

The Mexican tourism industry has been growing since its establishment around 1970, however it was not until the 1990s that locations such as Cancun began to receive a strong tourism attraction. The tourism industry emerged from the government’s recognition of the need for foreign investment to create an industry to support Mexico’s economy. With the growth in construction of hotels, entertainment and modern shopping facilities, the touristic resort was established.

Due to Mexico’s ideal climate and close proximity, many North Americans and Canadians have begun to migrate to areas such as Cancun during the winter months. Many others have chosen to retire or start businesses in the area. The term ‘snowbird’ has been associated with the increasing numbers of immigrants from the colder, northern countries who travel to Mexico to reside in the warmer weather, sometimes also benefitting from reduced taxes and dual residency status.

Owning a residence in Mexico may require obtaining a Mexican Trust, otherwise known as a Fideicomiso. The Trust has been designed to enable non-Mexicans to purchase properties in the zones where they would otherwise be restricted from holding the property title. The restricted areas in Mexico are 50km from the coast and 100km from any border.

The Trust required for purchasing in the restricted zones is arranged by Mexican banks and can be sought through a lawyer when purchasing the property. The Trusts are easily renewable and generally established for around 50 years. When arranging a Fideicomiso, the bank will be recorded as the owner of the property, however, the purchaser receives full control and use, enabling the purchaser to rent and also sell. In the case of selling the property, the bank will then either cancel the Trust, or transfer it into the name of the new owner. Purchasing real estate outside of the restricted zones does not require the establishment of a Trust.

The future for the real estate market in Mexico is positive, with the government aiming to increase the mortgage market for locals, along with foreign financial institutions beginning to invest in the Mexican mortgage market, reducing risks. The improvements are expected to create an increase along with more stability in the lending market. With Mexico’s large population and stable economy, the mortgage market is predicted to grow significantly. The foreign financial investments and tourism figures will also assist in a steady increase in holiday makers, retirees and second home buyers.

With the increase in banks offering loans for real estate, the competition is reducing interest rates to obtainable levels. The favourable conditions of the Mexican mortgage market, coupled with the worsening conditions of the US economic market are expected to further increase demand for Mexican real estate by locals and foreigners.

Mexico offers a tremendous opportunity for capital growth in touristic areas such as Cancun due to the current high and ever increasing numbers of tourists visiting the area annually, along with the emergence of a mortgage market and growing numbers of foreign making the decision to move to the area.

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