Disruptors Revolutionize Real Estate Rentals, SalesBy Cas Biekmann | Tue, 11/09/2021 - 14:53
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Mexico’s expansive real estate market had been gradually adopting new trends but the pandemic accelerated the transition. Developers are now looking for more space outside cities, cost-effective co-living and new ways to invest in property, said real estate insiders.
The pandemic has left a mark on Mexico’s real estate environment. Construction slowed down immensely and analysts say it will take a while before it recovers. On the other hand, the mortgage market was boosted by the increase in residential demand and offer, low interest rates and forced savings generated during the pandemic. The housing lag was reduced too. “The initial uncertainty shifted to a big opportunity for the company,” said Bernardo Cordero, Co-Founder, Flat.mx, a startup that buys and resells upgraded property. The company saw that these factors led many to try to sell their property, while many potential buyers saw slightly lower prices.
Yet few have sufficient funds to purchase expensive property, said Rodrigo Barrera, Co-Founder and CEO, HAMOC, which provides service as an aval (a necessary guarantor for renters in Mexico). “The pandemic has affected the market in offer and demand. Nonetheless, even before the pandemic we saw that people were looking to rent property. Not everyone sees buying a house as a good opportunity,” he said.
However, the economy is picking up, showing a clear growth in demand for the mortgages, Juan Kasuga, Senior Partner, CREDITARIA Mexico. Many are not looking to purchase housing right where they live, though: “People are migrating away from cities, where they rent, and buying property elsewhere,” Kasuga said. The main driver is that people, often working from home, are looking for a better quality of life within the ‘new normal.’ “An increasing amount of people are buying real estate in Mexico’s central region, in places like Cocoyoc, Valle de Bravo and Queretaro, considered real estate hot spots at the moment,” he added. One major selling point is the quality of internet: living at Mexico’s beaches appears to be an attractive proposition but lagging internet can soon become a major nuisance for remote-working professionals. For those still looking at property within the city, demands are also changing. “When we value buildings, we had to adapt this valuation to a bigger need for common spaces,” said Cordero, pointing toward how families frequently look for apartments that provide spaces that can entertain their kids.
The new way of living is also changing how people use office space. “Companies are looking for more advanced office spaces, with less of a focus on common areas and more of a focus on productivity and flexibility for workers who go there irregularly or infrequently,” said Samantha Macías, General Manager, Yellow Block. Now that hybrid home-office models are becoming popular, real estate companies need to step up and adapt their offer.
As some move away from the areas they traditionally lived in, others are looking to enter these exact areas now that spaces are becoming free. “The post-pandemic world is not going to lie down and relax forever. Schools and restaurants continue to add value,” said Barrera. Some areas, such as neighborhoods close to Mexico’s famous Reforma avenue, will remain popular for those reasons. “But some zones that were previously ‘hot’ to rent are no longer that enticing,” he added.
For those looking for spaces to work in person, new trends are emerging. Some do not have the money to rent or buy expensive properties in bustling areas of major cities. Co-living solves many of these issues, said Barrera. “Co-living is cost-effective because it gives people the opportunity to live in small, efficient spaces instead of large apartments. Co-living furthermore seeks to give an identity to social living through its shared spaces. It meets human needs by allowing people to live in a community,” supported Barrera. Other than co-living, co-owning properties is growing in attractiveness. Because it becomes increasingly difficult to purchase an apartment with one’s own budget, people are now gathering their resources to buy property. “People still want to own property, but the possibilities to do so are simply not the same as in the past decades,” concluded Barrera
Other, unforeseen trends could emerge soon, according to Cordero: “We will see the creation of products we have heretofore not seen in the market.” But whatever living trend people opt for, the online sphere is becoming increasingly important. “People are much more open to move online. You can see this in everything from video meetings down to commercial processes,” said Macías. “The question is how flexible real estate companies can be and innovate through technology.”
Many people look for websites to facilitate their search for property. In-person visits are still common, though many have begun to use digital tools for formal processes in renting or buying. The real challenge for real estate companies, then, is to give clients a pleasant experience as they rent or buy real estate. “We need to see how we can provide added value to clients, which are also becoming more sophisticated over time,” said Kasuga.