Weak Peso Boosts Mexico Real Estate Sales in USD
Property owners in Mexico are increasingly opting to value their real estate holdings using U.S. dollars (USD) instead of in pesos as a strategic move to protect properties from the peso’s depreciation against the dollar.
In fact, from January through September of 2016, the number of real estate advertisements in Mexico City that were written in dollars increased nearly six times over the number recorded during the same period last year, rising from 188 to 1,109, according to Propiedades.com.
"When there is a phenomenon of depreciation, pricing real estate in dollars instead of our national currency prevents loss of competitiveness and protects the appraised value of the real estate,” stated Leonardo Gonzalez, a real estate analyst at Propiedades.com “In addition, properties that are valued in pesos can lose their reference of value with respect to other properties internationally."
According to experts, in Mexico City, which is the capital of the country, this phenomenon is mainly seen in areas of upper middle-class or higher social status.
"When you see that many of the properties begin to sell in dollars, there is an uncertainty in the economy,” stated Ricardo Marentes, CEO of consulting firm Marhe. “Right now the global economic situation is still unstable, so people opt to guarantee the investment of their properties in dollars.”
This is also happening in tourist and residential areas, such as the many luxury condos for sale in Tulum, Puerto Aventuras, Playa del Carmen and other parts of Mexico’s Riviera Maya. In these areas, luxury, resort-style living is the norm, a reality that has made it one of the best places to move abroad and an area that is ripe for anyone who is interested in owning luxury condos and investing in Mexico real estate.
Read the rest at Investment Properties Mexico
Related: Mexico: High Uncertainty Is Exerting Pressure on the Peso - Commerzbank (FXStreet)
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