Is it too risky to buy presale real estate in Puerto Vallarta?
Real estate projects in Puerto Vallarta have come to a halt as the Ministry of Environment and Natural Resources (SEMARNAT) has shut down 22 developments, resulting in the loss of jobs and investment credibility in the popular tourist destination.
The shutdowns stem from the failure of these developments to present a federal Environmental Impact Statement (MIA), a requirement that SEMARNAT has denied to various developers. This action has left more than 6 billion pesos in limbo, affecting both the local economy and the confidence of investors and buyers.
Miguel Tejeda, Director of Administration and Finance of Constructora FH3, whose Carmelina development in Conchas Chinas has been closed for over six months, stated that each closed development averages 40 units, translating to approximately 880 apartments valued at around 400 thousand dollars each. This means that around 352 million dollars, or slightly over 6 billion pesos, is currently held up.
Moreover, Tejeda revealed that each development employs around 200 direct workers, so roughly 4,400 workers are now jobless due to the closures. This figure does not account for the additional indirect impact on contractors, suppliers, electricians, drywall workers, carpenters, window installers, and other professionals.
Tejeda argued that these developments were constructed in areas that had previously been built upon and impacted, rendering an Environmental Impact Statement irrelevant. He further explained that the owner of SEMARNAT is also the one denouncing the developers, thereby acting as both judge and jury. Tejeda assured that his company had all the necessary documentation and permits in order and even argued that the MIA was not applicable to their development.
Raúl Rodríguez Rosales, the regional delegate in Jalisco for SEMARNAT, has denied the MIA requests from Tejeda and other developers, damaging investor confidence in Puerto Vallarta’s real estate market. Potential buyers, both national and foreign, have become wary of investing in the region due to the widespread news of pre-construction developments being shut down.
Consequently, many investors and buyers have diverted their capital to other states, particularly in the southern part of the country, where the federal government provides full support and legal assurance for investments.
Another significant economic impact of the closures is the loss of tax revenue for the Puerto Vallarta City Council. Tejeda noted that SEMARNAT’s actions were affecting the entire economy of Puerto Vallarta, including employees, investors, customers, and even the municipal government’s tax collection projections.
The closures began in Conchas Chinas, where residents oppose new constructions like the Carmelina development that partially obstructs views from existing homes. These residents have found a way to halt construction by demanding Environmental Impact Statements and have even brought the issue to the attention of President Andrés Manuel López Obrador.
Tejeda identified Raúl Rodríguez as the person denying all the environmental impact statements in Puerto Vallarta. If these shutdowns continue, investment confidence in the region is expected to decline sharply, as businesspeople will be reluctant to invest in such projects. In the meantime, developers have chosen to shift their focus to Nuevo Vallarta.
Is it too risky to buy presale real estate in Puerto Vallarta?
Real estate projects in Puerto Vallarta have come to a halt as the Ministry of Environment and Natural Resources (SEMARNAT) has shut down 22 developments, resulting in the loss of jobs and investment credibility in the popular tourist destination.
The shutdowns stem from the failure of these developments to present a federal Environmental Impact Statement (MIA), a requirement that SEMARNAT has denied to various developers. This action has left more than 6 billion pesos in limbo, affecting both the local economy and the confidence of investors and buyers.
