The year 2020 will be known as the year that made a difference in all areas from health to the methods of trading goods and services to social interaction. Of course, the real estate sector was not far behind, and although the country was expected to grow 4% this year, this forecast has changed.
The Bank of Mexico estimates that the Mexican economy may contract between 8.8% to 12.8% this year, while the Ministry of Finance foresees a fall of between 7% and 10%, and for next year the SHCP is betting on an economic recovery with a projection of 4.6 percent of GDP , and to achieve a balance in public finances and support health sector spending and investment with the intention of mitigating the impact of the pandemic.
For the same reason, the sector is facing a somewhat complex recovery outlook, so it is important to highlight real estate investment , since the purchase of real estate is one of the safest investments due to the profitability it offers, that is, to your return on investment.
Let us remember that despite the world situation, the demand for real estate did not stop as it was a staple product, and rental properties kept the sector moving, although it faced problems due to the loss of jobs. But if factors such as the maintenance of low interest rates and accessible terms for financing by banking institutions are taken into account and that the authorities have announced economic plans to revitalize the construction sector, they give certainty that the market it’s not going to stop.
That the processes to promote the granting of loans are less complicated will be of great help to accelerate the real estate commercialization.
Currently, the demand for properties for sale has a greater weight towards the segments of social interest and medium interest, that is, properties that do not exceed 3 million pesos, with 44% of the total demand. It is followed by the residential segment with a 31% share (3-7 million pesos) while the residential plus segment represents 24% of total demand (properties that exceed 7 million pesos).
When reviewing in more detail the evolution of the demand for housing for sale by segment in the last 6 months, in general terms there was a contraction, especially the pandemic caused a pause in the decision to buy, however the intention did not cease to exist . We can see that only the segments of social or economic interest and that of medium interest are those that have had an upward behavior, with an increase of 5 and 8% respectively, while the Residential, Residential Plus and Premium segments decreased by -3 %, -44% and -48%, respectively .
It should be noted that the construction industry is essential to reactivate the country’s economic growth, after the effects of Covid-19, the importance of housing lies in the fact that it is an activity that triggers 37 of 42 economic branches, according to Canadevi. Once the end of the confinement has been determined, one of the changes that can be seen in the housing models, in addition to the postponement in the purchase as happens in all crises, are the architectural changes, since after the experience in the quarantine, the population could relegate some luxuries for spaces more suitable for their new needs. The developers have as an area of opportunity the creation of more suitable spaces prioritizing ventilation and natural lighting, as well as automated systems.
The recovery will take different times and will be by region, with a trend for housing in better located places. Prices could remain or reflect slight downward adjustments in the coming months, mainly because demand is uncertain and developers remain cautious to start new projects, and the projected recovery for 2021 will be slower than previously thought. in the middle of this year.
One of the greatest hopes for the sustainability and recovery of the real estate sector is the continued demand for housing ; In addition, there is some hope regarding economic recovery from the employment perspective, which halted its decline in June.