Steel Tariff to Impact Real Estate Projects in Mexico: ADI

US President Donald Trump's decision to impose a 50% tariff on steel and aluminum is expected to directly impact construction costs in Mexico’s real estate sector, says the Mexican Association of Real Estate Developers (ADI).

“Developers are being cautious regarding tariffs and the relationship with the United States. Many large-scale projects will require stable conditions and greater certainty during the first half of the year,” says María José Fernández, General Director, ADI.

Fernández says that the cost of real estate projects could rise by about 10%, a projection echoed by the Mexican Chamber of the Construction Industry (CMIC), reports El Economista.

The ADI’s members have ongoing and planned industrial projects in Mexico’s northeast, Bajio, and central regions, as well as tourist developments in the Riviera Maya, Riviera Nayarit, and Los Cabos. The sector also anticipates the revival of commercial centers that were delayed during the pandemic.

While uncertainty stemming from US tariffs on steel has impacted real estate development, Fernández is optimistic about the Mexican government’s response. She highlights the efforts of President Claudia Sheinbaum and Minister of Economy Marcelo Ebrard to engage in negotiations to minimize the effects of the tariff, creating favorable conditions for new developments.

Beyond rising material costs, Fernández emphasizes the importance of legal certainty and streamlined permitting processes to boost investment in the sector.

Speaking at The Real Estate Show, organized by the ADI in Santa Fe, Mexico City, Mayor Clara Brugada reaffirmed the capital’s openness to real estate investment — provided it aligns with sustainable development and the right to the city.

“Investors can have confidence that Mexico City is open to projects that guarantee the right to the city and promote sustainable development,” says Brugada.

Brugada calls on developers to submit sustainable proposals that improve environmental conditions, reduce pollution, and promote responsible water usage. She stresses the importance of urban growth through a lens of sustainability, social integration, and territorial planning.

She also reports that, since the opening of the city’s One-Stop Window for the Real Estate Sector in February, 50 projects have been reviewed and 32 approved, representing over 4,000 new housing units and more than MX$20 billion (US$1.04 billion) in investment.

Meanwhile, Jaime Fasja, President, ADI, announced a projected investment of nearly US$15 billion in 2025 by ADI members, positioning real estate developments as key drivers of economic growth and social well-being.