The first half of 2023 has seen a widespread increase in housing prices across the country. Houses acquired via a mortgage loan in Mexico averaged prices of over MX$1.6 million (US$93,800) in 2Q23, which represents an 11.5% increase when compared to 2Q22 and a 33% increase from 2019’s figures, a report of the Federal Mortage Society (SHF) says.
According to SHF's Housing Price Index, the states that contributed the most to the national increase in housing prices include Baja California Sur with an 18.1% rise, Quintana Roo with 16.8%, Sinaloa with 16%, Baja California with 14.9% and both Guerrero and Nayarit with 14.8%. Meanwhile, states that made lesser contributions include the State of Mexico at 6.7%, Durango and Puebla with both at 7.1%, San Luis Potosi at 7.7% and Tlaxcala at 8.4%. Similarly, La Paz, Baja California, led municipalities with an 18.3% increase, while Metepec in the State of Mexico showed the lowest contribution at 6.2%
Regarding the metropolitan areas in the country, the index revealed that the Valley of Mexico experienced an increase of 10.9%, driven by the rise in prices of middle to upper-class residential homes. The Guadalajara metropolitan area saw an increase of 12.5%, primarily influenced by the prices of homes located in peripheral zones. Similarly, the Monterrey metropolitan area showed growth of 11.3%, attributed to the increase in prices of homes with more than two bathrooms.
The Toluca metropolitan area showed an increase of 7%, as a result of the surge in prices of condominiums and apartments. The Tijuana's metropolitan area recorded a significant increase of 14.9%, stemming from the growth in prices of affordable housing. The Leon metropolitan area, Guanajuato, witnessed a 9.3% rise in housing prices, attributed to the uptick in the value of houses with parking spots. Lastly, the Queretaro metropolitan area saw growth of 13.5%, primarily due to the upward trend in prices of pre-owned homes.
SHF’s Index also showed that during 1H23 there was a decrease of 7.2% in the number of appraisals compared to the same period in 2022. Still, new-home purchases are experiencing a positive trend in 1H23, with an increase of 12.7%, while pre-owned purchases grew 10.7%. However, the Mexican consumer still prefers pre-owned properties as they accounted for 60% of the traded houses, while new homes scored only 40%. In this context, mid-residential housing slightly grew more than other kinds of properties, as it registered an 11.9% increase. Similarly, standalone housing, condominiums and apartments (considered together by the index) and affordable social housing grew by 11.8%, 11.4% and 11.1% respectively.
SHF noted that this increase in housing prices followed 3.7% growth in real terms of the national GDP during 2Q23, with growth of 3.3% of permanent workers registered at IMSS, average inflation of 5.1% and an average mortgage rate of 11.4%.