Puerto Escondido: Attractive for Real Estate Developers

As Oaxaca is becoming an important tourist destination, real estate developers are more willing to invest in the state, mainly in Puerto Escondido, its most visited place. The government of Oaxaca foresees that tourism will create an economic benefit of over US$871.5 million and is expected to reach 5.3 million visitors in 2022. Amid this development, real estate developers are catching on to the trend. 

According to David Agmon, Co-founder, Monific, the COVID-19 pandemic benefited beach-focused real estate developers since a lot of people migrated from cities to the coast as remote work enabled the move. Among the most popular places in Mexico are Tulum, Playa del Carmen and Puerto Escondido, with the latter being the trendiest destination. "Over the past three years, properties have doubled their prices in Puerto Escondido, where developments are valued from US$300,000 to US$400,000, compared to Tulum, Quintana Roo, where developments cost between US$2 million and US$3 million," he said. 

Within this context, real estate developers perceive Oaxaca as a great investment opportunity. According to Agmon, Oaxaca’s culture and gastronomy are drawing in tourists. However, the state’s ability to host tourists is still underdeveloped since important destinations like Puerto Escondido have only 100 available rooms in hotels and other properties destined to be rented. 

This has led real estate developers to plan new projects to meet the growing demand. According to Monific’s data, real estate investments have increased by over 10 percent per year during the past five years in Puerto Escondido, boosted by the rising fame of the coastal town. "The area is experiencing an ideal growth stage with great demand and a limited offer," said Agmon. 

Despite the potential growth, Agmon highlighted that the region still lacks the essential infrastructure to exploit all its potential, especially regarding connectivity. "The airport does not have enough flights and the government is just now inaugurating the Oaxaca - Puerto Escondido highway. Several hotel developments are just starting, and we hope that the local government invests in services," he added. 

In October, the Ministry of Infrastructure, Communications and Transportation (SICT) promised that it will finish the Barranca Larga - Ventanilla highway by the end of 2022. The work has been in construction since the Felipe Calderón administration, when confidence in the region’s tourism picked up. The project aims to reduce time travel from Oaxaca to Puerto Escondido from 6 to only 2 hours. However, its construction has been delayed for more than 10 years.