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Mexico: House Prices, Rents, and Rental Yields

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Last Updated: Nov 29, 2005

Yields are high for luxury housing in Mexico

Last Updated: Nov 29, 2005
MEXICO CITY &
GUADALAJARA CITY - Apartments
COST (US$) YIELD (p.a.) PRICE/SQ.M. (US$)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
100 sq. m. 90,000 700 9.33% 900 7.00
150 sq. m. 140,000 900 7.71% 933 6.00
MEXICO CITY &
GUADALAJARA CITY - Houses
200 sq. m. 160,000 1,200 9.00% 800 6.00
250 sq. m. 170,000 1,500 10.59% 680 6.00
300 sq. m. 200,000 2,200 13.20% 667 7.30
350 sq. m. 230,000 3,000 15.65% 657 8.60
400 sq. m. 492,500 3,500 8.53% 1,231 8.80
500 sq. m. 500,000 4,000 9.60% 1,000 8.00
PACIFIC SIDE,
BAJA CALIFORNIA - Houses
60 sq. m. 35,310 235 7.99% 589 3.90
100 sq. m. 64,735 330 6.12% 647 3.30
150 sq. m. 115,000 600 6.26% 767 4.00
230 sq. m. 175,000 706 4.84% 761 3.10
CARRIBEAN SIDE,
YUCUTAN PENINSULA - Villas
100 sq. m. 200,000 1,300 7.80% 2,000 13.00
150 sq. m. 215,000 2,000 11.16% 1,433 13.30
200 sq. m. 350,000 10,000 34.29% 1,750 50.00
300 sq. m. 450,000 15,000 40.00% 1,500 50.00
350 sq. m. 500,000 20,000 48.00% 1,429 57.10
Source: Global Property Guide

The small supply of good quality rental units as compared to the huge demand from expatriates, retirees, and tourists have driven up the yields for Residential and Residential Plus segment houses. Rental yields for apartments and houses in Mexico City and Guadalajara City start at 7.7%. This can go as high as 15% for 350 sq. m. Residential Plus properties.

Rents dropped by 13% from 1994 to 2001. It rose by 4.6% from 2001 to 2003 before falling again. Rents are still about 11% lower than its 1994 level. On the other hand, real house prices dropped by 20% and 17% for economic and middle segment houses from 1994 to 1996. It remained stable until 2000 before it rose slowly rose. Middle segment houses are still 7% cheaper now than in 1994.

 

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