The Mexican holiday home market is a little tricky to navigate.
The holiday market in Mexico is an all-time high.
According to data from Zillow, holiday home values have jumped more than 1,200% in the past year, reaching $2.3bn in 2017.
But it’s unclear what’s driving that surge.
While there are many factors at play, such as foreign investment, low interest rates, and a lack of competition, the main driver seems to be an influx of holiday home buyers from other countries.
Zillows data shows that foreign investors are buying holidays home in record numbers, adding an additional $1.4bn in total value to Mexico’s market over the past 12 months.
The influx of foreign investors has also contributed to a huge increase in holiday home valuations.
In fact, Mexican holiday homes have been selling for more than double their value over the last 12 months, according to Zillowed data.
Many of these buyers are looking for an affordable holiday home, and the holiday home boom has been taking its toll on Mexico’s economy.
While holiday home developers are still trying to find a balance between the needs of their clients and the need for affordable housing, the influx of foreigners has had an impact on prices.
Zillerow’s data shows a jump in holiday house valuations in 2018 alone, with holiday home sales surging almost 300% over the course of the year.
However, the holiday homes are being built in areas where people are not used to living in the same house.
Many buyers are using existing properties that are already underused, with many homes already being converted into luxury apartments, which means there’s not a lot of new development happening in Mexico.
Zilla said that the problem of overbuilt holiday homes is likely due to a lack and over-purchasing of the market, with a large number of holiday homes sitting vacant for too long.
“We are seeing a lot more and more holiday home developments that are sitting vacant,” he said.
“A lot of these properties are going to be sold to developers who have already purchased the land.”
Some of the projects are already being built, and many are already undergoing construction.
Zillo said that there are also some properties in Mexico that are not being built because the local government is not able to afford the cost of the land.
“Some of these sites are very large, and it takes a long time for the developers to build them,” he told Al Jazeera.
“It’s a bit of a mess, especially for the rural areas, but I think the bigger issue is that these properties need to be replaced.”
He added that many holiday home owners are reluctant to move because of the lack of affordable housing options.
“These properties are not going to work as long as they are vacant,” Zilla added.
While Mexico’s holiday home growth is increasing rapidly, there are still some areas where holiday home construction has been slow.
The problem is that the holidays homes are already sitting empty.
ZILLOW’s data suggests that the majority of holiday house developers are trying to keep their prices low and build out luxury properties in the meantime.
The data also shows that holiday home builders are building out luxury apartment projects, with the majority (57%) of luxury projects built.
But even with these luxury apartment developments, ZillOW’s estimates suggest that the market for holiday homes in Mexico has grown by just 0.2% over 2017.
Zillas findings also show that while there has been a boom in holiday homes, the growth of luxury properties has slowed down.
“The luxury development boom is still very active,” he noted.
“They are still building luxury properties, but there are fewer luxury developments.
There are more luxury developments, but the luxury development trend is slowing down.”
He said that in the near term, he expects that luxury homes will continue to build out, with luxury apartments in some areas being completed.
However that could change if Mexican government policies continue to push developers to expand luxury developments and build luxury apartments.
Zalles data also indicates that some Mexican holiday houses are actually being built for tourists and residents, as well as vacationers.
But Zillots data suggests there are a few exceptions to this trend.
“If you look at all of the luxury projects that are in some of the major holiday regions, there is a lot that is happening outside of holiday properties,” he added.
“In some cases, luxury projects have been completed for tourists, but they’re still in the process of construction.”
“The majority of luxury holiday properties are built for residents,” he continued.
“So if they’re going to build luxury homes, then the luxury homes are not there.”