Investing in Real Estate in Guadalajara
Mexico has shown itself as a great option to invest in real estate. The Metropolitan Area of Guadalajara (“ZMG”, for its acronym in Spanish), in the state of Jalisco, is one of the best areas to that end. It has maintained itself as the second largest city of Mexico over the years, which justifies its real state growth.
In this post, Juan Pablo provides a brief analysis of the areas to invest in real estate with great potential in the Metropolitan Area of Guadalajara.
The Economic Growth and Real Estate Development in Guadalajara
In context, the metropolitan area of Guadalajara has had socioeconomic growth of 16% and there are estimates that it will continue to grow at a rate of 7% in the next 10 years. All socioeconomic sectors show very similar progress, however, “social” housing slightly shines above the rest, where the value of the properties goes from 15k-25k USD.
The economic growth, both locally and at the national level, fell at the start of 2020 because of the pandemic, which is affecting the whole world. Nonetheless, even though the COVID effect caused a fall of 20% at a national level and 15% at a local level, real estate has recovered almost to its former levels.
Juan Pablo García
Lawyer
Mr. García is a real estate lawyer based in Guadalajara, Mexico.
The fact that there has been constant demographic and economic growth, as well as housing projects of high acquisitive power in the metropolitan area of Guadalajara, means that there is a positive outlook for real estate development.
Housing Real Estate Development
The biggest trend in housing real estate projects is without a doubt that of vertical housing. However, at a national level, in the last 3 years, the sales of this type of housing have had a fall of 15%. COVID has caused possible buyers to restructure and reduce the budgets that they would destine to purchase a home. Despite everything, the price per square meter in every sector has maintained its upward trend.
The metropolitan zone of Guadalajara is the countrywide city with the most growth in vertical housing. The most opportunities center in the housing sector “residential plus” that goes from 140k to 300k USD, followed by the “residential” sector that goes from 60k to 140k USD. Also, there are areas within the metropolitan zone of Guadalajara that concentrate the most on housing offers in this category, those would be the areas of Americana, Ladrón de Guevara, and Moderna.
Vertical Housing in Guadalajara
Following that train of thought, most of the vertical housing selling and reselling in Guadalajara, that is 58%, targets demographic sectors whose social-economic level has only increased by 28%. On the other hand, there is a shortage of offers in the “medium” housing sector, which is 11% and goes from 20k to 60k.
Horizontal Housing
Contrary to vertical housing, the available opportunities center around the “residential” sector for the horizontal housing, while the sectors “medium” and “residential plus” there is a shortage of available opportunities in comparison to the socio-economic growth.
Housing Rentals
Although the sales market is larger than the rental market in the metropolitan zone of Guadalajara, rents have increased significantly and are expected to continue to do so. The increase in rents has been due to several reasons, such as:
- generational change,
- shorter distances,
- benefits such as maintenance and equipment,
- growth in demand,
- fear of long-term credit,
- digital nomads,
- new management and collection tools, and
- falling bank rate.
Industrial Real Estate Development
Finally, industrial real estate represents a current circumstantial opportunity. The state of Jalisco is experiencing significant industrial growth as many technology companies, such as Amazon and Mercado Libre, have decided to invest in and open warehouses and distribution centers. The metropolitan zone in Guadalajara is located within an important area of automotive, technology, and manufacturing industries.
Corporate Real Estate Development
Undoubtedly, the most affected real estate market is the office market with a decrease of up to 45% according to reports. Comparing supply and demand in this market, one may find an inverted pyramid. The order of supply goes from high to low for corporations, SMEs, and start-ups, but the order of demand goes from lower to high for the same sectors.
Real Estate in Guadalajara
In conclusion, the metropolitan area of Guadalajara shows a favorable growth trend and offers a wide range of opportunities for all types of sectors and markets; therefore, it is convenient to choose this area to invest in real estate.