Tampico, Cheapest City to Construct Houses: CMIC

In an environment with low investment rates and increasing material costs, the construction sector reported that Tampico, Tamaulipas is Mexico's cheapest city to construct houses in 2022. Though costs increased in the city, they did so below the industry average, therefore Tampico stands out among other more densely populated areas like Monterrey.

According to the National Chamber of the Construction Industry (CMIC) Cost Engineering Center, Tampico reported better results than other key construction areas like Mexico City and Monterrey. By contrast, Matamoros ranked as the municipality with the fourth highest costs on the back of price increases for materials, labor and rent for machinery.

The report highlights that even adding to the figures of Ciudad Madero and Altamira in Tamaulipas, construction costs increased only 1.3 percent, below the National Index for Producer Costs calculated by the National Institute of Statistics and Geography (INEGI). According to INEGI’s data, the national average for rising costs in the housing sector is 10.4 percent. Other sectors like the construction of commercial properties, industrial plants, highways and bridges face ranges between 9.3 and 6.5 percent

CMIC highlights that the decrease in machinery renting costs by 2.4 percent was a key factor that kept overall costs low. Additionally, construction material prices increased only 0.6 percent year-over-year but the cost of manpower increased by 5.6 percent. 

Cities like Guadalajara, Monterrey and Mexico City scored an increase of 9.6, 11.1 and 12.5 percent, respectively. The chamber highlighted that the municipality with the highest increase in costs was Tepatitlan, Jalisco, whose costs increased by 19.6 percent. 

The housing sector has been experiencing a turbulent 2022 and experts foresee a similar situation for 2023. Housing may be one of the infrastructure sub-sectors that will contribute the least to the industry’s GDP because of a lack of demand for new houses. However, other industry insiders like the Colombia-based prop-tech TuHabi identified different opportunities and are pushing to incorporate new technology. According to TuHabi, demand for second-hand houses is growing, and the incorporation of technology in the purchasing process could boost sales and make processes more efficient. “We have a major problem in Mexico, as we do not possess the information to successfully buy or sell a house. We are building the required infrastructure to make house trading quicker and easier,” Gerardo Fernández, Director General, TuHabi, said.