Historically, investments on Real Estate are some of the most profitable when markets are in debt and shares are low. In Mexico, Real Estate represents ~10% of its total GDP, from which housing is accountable for 60%. During 2020, the housing segment has conserved its dynamism and reached high prices compared to other LATAM countries, whereas the offices and commercial sector has experienced excess supply. With the COVID-19 pandemic, Real Estate has faced several challenges driven by unemployment, home office, and the peak of E-commerce.
In the long-term, new trends are expected and joined with high returns on investment may result in an increased attractivity for investors. Regarding the housing segment, a housing deficit, decrease in the population growth rate and a generational factor changing housing requirements will play a significant role for the future. On the other hand, integration of services in one space for buildings that have mixed uses is starting to become visible in Mexico’s metropolitan cities. As the pandemic is successfully handled, opportunities will arise and a change in business models will be necessary to build a winning value proposition within the Real Estate sector.
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