That's something that has always put me off buying here. We've been here 6 years now but still can't say I'm sure we'll still be here this time next year. I'd not enjoy deciding to go back home and be stuck with trying to sell a property that most of our cash is tied up in from 5,000 miles away. Particularly when you see how long many places stay unsold for.
Real estate market This must be do in part to the financial collapse in the U.S., with its direct, and indirect impacts on the Mexican real estate market. The boom in real estate that we witnessed, world-wide, in the last decade, is unlikely to be repeated any time soon. (Many are predicting a further deterioration in home prices in the U.S., with no prospects of demand catching up with supply for perhaps another ten years. Why wouldn't this also be the case here?) One condo project we were looking at last year has all but ceased operations, with just a fraction of the completed units occupied, as buyers reneged on their contracts to purchase signed in the boom years, and accepting whatever penalties or losses required rather than owning a unit that they did not really want, and could not be sold. People with really big money seem to be seeing some opportunities in this situation, and are moving in, in some cases, to buy entire towers of units from hard pressed developers. That said, I think there may be other factors at work, too, and could present a best-case scenario including diminution of the violence, here, with its head-line grabbing potential, coupled with hoards of American retirees looking for a place where their dollars may go farther, and finding Mexico, and Cancun, attractive.
I think that depends where you look and on the sellers... many Mexican sellers would rather a place rot than take one single peso less than their (really high) asking price, thus you have places that sit.. the high dollar condos and beach houses are not "in demand" right now for the reasons V stated, not to mention there are simply way too many of them... (and they're still building more) In any case.. I'd bet with the traffic you get on this site selling wouldn't be too hard if you placed prominent ads, but I think you'd find the grass isn't much greener "back home" once you've been back there a while and reality sets in... In answer to matkirk.. I'd say the answer to the existing mortgage thing is: no, a foreigners can't take it over.. for the simple reason that foreigners generally don't have enough credit in Mexico to do so...
Moving to Cancun We thought about that too but after figuring out the finanaces of paying over $1000usd/month for a nice, comfortable house in a nice area, it took 2 years to decide buying was a MUCH better option. Figuring on what you've said, Steve, 6 years at $1000/month is almost $72,000 invested with NOTHING to show for your money. There are many houses just "sitting" that could have been affordable and I just don't understand these thoughts...Then, when you sell, list it for a reasonable price...there are NO WINDFALLS in Cancun..price it reasonably and you'll get your price. When I bought my house, I put the deposit down and had 3 other binders behind me because the house was really nice, in a nice neighborhood and well priced! The house wasn't on the market for 1 day! Given the economic climate worldwide, you might get a good deal if you're buying. I have lived here for 12 years and would not consider leaving anytime soon. We miss the culture, as V stated, but there are other forms of "culture" to be discovered. John Irving said "If you are lucky enough to find a way of life you love, you have to find the courage to live it". I agree....
Seems that in the days when the economy was booming Cancun underwent a huge increase of building of condos many which to this date stand unfinished or were started in some form illegally. Much of the money is said to be for the purpose of drug lords to hide their cash and building condos to resell would legitimize their cash basis and not have to worry about explaining to the government on how they became suddenly so wealthy. Now with all these places standing fully built or partially built, empty in many cases those who own property in Cancun find that what they have is not worth as much as it did before due to the overflow of real estate and lack of buyers due to the economic conditions in the US and the rest of the world. So all property owners now suffer for a while. But the area will come back in time and may even get more valuable then ever. Especially since there really is not much space to build waterfront.
I know, makes me cringe when I think about it. There's a few other reasons, other than being unsure of whether we'll be here for the long term. There seems to be no way of knowing whether house prices are trending upwards or downwards in price. At home there are several indices published and it's easy to follow the trends from month to month and from one area to another, even by post (Zip) (SM) code. I'm sure there is similar in the US? I don't recognise a good deal when I see it, partially due to the reasons above. I dont know if a place is overvalued or undervalued. At home I can spot them, here no. I dont want to get ripped off, and of course everyone here is as honest as the day they were born! Ridiculous mortgage rates. No way am I going to pay 15% interest on a mortgage. Besides, I'm not sure I could get a mortgage for any decent amount since much of my income never sees our Mexican bank account and goes straight into savings in the UK where they actually pay you interest! Any house we do buy we would not take a loan for it would have to be 100% down and for the type of place we want we dont have enough cash yet. I make a decent income here, far more than what I ever made at home, but not enough to buy our dream place outright. Sure we could buy somewhere, but it wouldn't be the home we aspire to both in size and location, so why bother? It would only make us unhappy. I tend to tie the majority of our cash up in mid term savings bonds and to avoid penalties I'd rather let them run full term. Next summer is when our biggest one matures so it will probably be review time then. I wonder whether it would be better to invest in property at home to rent out, where I understand more fully what's going on. We have a 750 sq metre plot in Alamos II we bought 5 years ago. It's been jungle ever since, but one day it will be developed and might be the place we want to build a home. Buying somewhere else beforehand would make such a transition more difficult.
Buying here I'm willing to entertain a best-case scenario for Cancun- a drop in drug related violence across Mexico, a pickup in the world economy, a strengthening peso, and Cancun remaining a popular destination for American and other tourists. You can't take away its proximity to the U.S., making it quick and easy to get here from the U.S., and often with dirt cheap airfares. Cancun has been a popular place with Mexicans desiring to buy a second home. One of the projects we're looking at buying is mostly owned by people from Mexico City. The locals I meet seem to love Cancun, and think it a great place to live, with unstable employment being the main issue for them (however, the opportunities for work remain greater than in many other parts of Mexico, and Cancun is a magnet for those looking for work). For Mexico to again prosper, it's going to have to reach out to a world beyond the U.S. NAFTA had the effect of concentrating even more of Mexico's export market in the U.S., which now accounts for 80% of Mexico's exports. China could become a source for direct, foreign investment, if they ever began to see Mexico as a useful partner in trade and development. Bimbo opened production in Beijing in late 2008, so at least some Mexican companies are beginning to look east, seeking ways to exploit the rapidly rising wealth of China, and will help make Chinese investors more aware of Mexico. On the personal level, you can still get attractive places to live here for less than the equivalent might be in other tourist destinations. For people like us, who don't like to get too tied down, the opportunity to rent out a place (even if you must rent cheaply, in this presently weak market), or do a housing swap with those wishing to spend time in Cancun, helps allay the concern that it might be hard to sell a property, here, by making owning more attractive at an emotional level. For us, and the way we live, Cancun is a cheaper place to live by a significant percentage over what it would cost us to live in the U.S. When we do the numbers, even accepting that we might sell in ten years for no more than we paid (which is really selling at a significant loss, owing to inflation), buying still appears to be the cheaper route when compared to renting comparable property (a mortgage might change that bottom line) and, you have to live somewhere!
Jorge and I are definitely planning on buying a home here, or possibly even investing, once we get enough cash for a down payment Someday!!
If you were to borrow 2 million pesos over 25 years at a constant rate of 15% you'd pay a total of 7.68 million pesos back of which 5.68 million would be interest. Your monthly payment would be 25,600 pesos of which 18,500 pesos would be interest with 7,100 going to pay off the capital. Let's say you paid the 7,100 in rent instead and saved the 18,500 each month. Even if you received no interest on your savings it would take you 9 years to save 2 million.
Great, now all I need to do is save between 9,000 and 18,000 pesos a month to buy a somewhat decent house in 10 years. That's going to be fun haha But yeah, I agree *mostly* with Steve. The interest rates here are so incredibly ridiculous, that it's almost foolish to buy something without paying a very, very hefty down payment. Guess I'll be renting for a long time to come.
