How Real Estate and Tech Can Drive Mexico’s RecoveryBy Nico Barawid | Mon, 01/18/2021 - 16:46
The COVID-19 pandemic has dramatically impacted Mexico’s economy. With an estimated unemployment rate of 11.7 percent by the 2020, as well as an 8.6 percent economic slowdown, the country faces one of its greatest economic challenges in decades. However, with expectations of a 4.6 percent recovery in national GDP this year, there is reason for hope of at least a partial recovery and a path toward growth in 2021. Amid the downturn, the real estate market too has taken a substantial hit during the global pandemic. Nevertheless, the real estate and technology industries are set to become a driving force for investors and the business environment in Mexico in a post-pandemic world.
Real Estate Market Foundations
The real estate market, whether in housing, hospitality or industrial, has a unique place within the wider economic landscape. The built environment is the foundation for the cities of the not-so-distant future, where safety and sustainability converge for the creation of smart spaces.
Since 2014, the real estate sector has been experiencing strong growth in Mexico. According to the National Institute of Statistics and Geography (INEGI), the real estate services and rental sector contributed 10.3 percent to national GDP, equivalent to MX$2.4 billion (US$121 million), during the first quarter of 2020. Its survival and path back to growth is instrumental for the country's economic recovery. Part of this is due to the incorporation of new technologies in the real estate market, offering innovative solutions that have led to the creation of a new vertical: Proptech.
Digitalizing Our Lives
Solutions such as virtual touring, smart devices connected at home, or natural language processing models to create better products and improve operational processes in the market are some of the myriad technologies that have allowed real estate technology players to offer safer spaces to enhance people’s lifestyles in the middle of a pandemic. For example, social distancing measures have led to an increase in smart devices intended to decrease human interaction. According to a report by Amazon, voice command devices, like Alexa, have increased in sales up to 65 percent worldwide. In Mexico, 8 billion digital voice assistants are expected to be used by 2023, compared to an estimated 2.5 billion in 2018. It is precisely this type of technology that has allowed Casai to offer increasingly safe experiences to its guests and consequently, maintain an 80 percent occupancy rate in its stays.
This is only one illustration of how millions of families are increasingly adopting digital solutions at home. By digitalizing the real estate industry, Mexico is opening the door to new investment opportunities, leading to the creation of jobs in several markets: from software developers and customer service executives to specialized real estate agents, stimulating the workforce in a post-pandemic era.
2021 will see great challenges to bring back stability; however, this represents a time of innovation to set the foundations of safer and smarter cities and spaces with a focus on cultural sustainability and local development. It’s undeniable that both technology and the real estate market can introduce a series of innovations and solutions that could transform the way people live and explore cities in the near future.