In 2023, the vacation home market in Mexico experienced a notable decrease in sales due to a combination of high demand and a slowdown in construction. According to Gene Towle, general director of the consulting firm Softec, approximately 15,399 vacation homes and apartments were sold across the country’s 15 main markets last year, marking a 21.28% annual contraction from the 19,568 units sold in 2022. These homes, on average, were priced at $280,000.
This decline in sales is attributed to diminishing inventories and ongoing projects. “Sales have decreased because inventories and products in process have also decreased. This tells us that it is a solid market that has demand, but that the merchandise needs to be replaced,” Towle commented.
The majority of these sales were concentrated in key locations. Cancún-Riviera Maya, Mérida, Puerto Vallarta, Mazatlán, Tijuana, Los Cabos, and San Miguel de Allende accounted for 90% of the vacation home units sold in 2023.
Market Value and Future Outlook
Despite the recent downturn, the value of the vacation home market in Mexico stood at 6,363 million dollars at the end of 2023. Softec forecasts that the sector will rebound, driven by the surge in international tourism, potentially reaching a market value of 7,000 million dollars by 2030.
Mexico has 15 active markets in the development and marketing of vacation homes, with seven primarily catering to the international market, including Los Cabos, Cancun-Riviera Maya, La Paz, San Miguel de Allende, Vallarta, Tijuana-Rosarito, and Puerto Peñasco. The remaining eight markets, such as Mérida, Mazatlán, San Carlos, Ixtapa, Acapulco, Veracruz, Cuernavaca, and Huatulco, are more oriented towards the national segment.
Shift in Market Dynamics
The Cancun-Riviera Maya area led the market in 2023, recording the highest volume of vacation home sales with 6,461 units, valued at 2,519 million dollars. However, Juan David Vargas, general director of Propiedades.com, noted a shift in demand towards Mérida due to the lag in construction projects in the Riviera Maya.
The lack of development in the Riviera Maya and subsequent price fluctuations have spurred growth in new areas, particularly in Yucatán. Mérida, known as the “White City,” has witnessed a surge in property searches on Propiedades.com, with a monthly average of 161,098 searches in 2023, a significant 186% increase from 2022. Vargas highlighted Mérida’s strategic location, security level, and ability to absorb the excessive demand that the Riviera Maya could not accommodate. This has led to Mérida becoming one of the safest cities in Mexico, with the highest appreciation in both houses and apartments over the past five years.
As the market adjusts to these changing dynamics, stakeholders in Mexico’s vacation home sector continue to navigate the challenges and opportunities presented by shifting demand and construction trends.
