Mexico named best foreign country for American real estate investments

02 May 2018 Consultancy.lat

A study conducted by Wire Consulting names Mexico as the number one place for American citizens to invest in real estate abroad. Factors which contributed to the ranking were proximity, the local language and cost of living.

Four Latin American countries appear on the list of survey results for Americans looking to purchase property outside of the US. Mexico takes the top spot followed directly by Costa Rica. At number 9 is Panama, and filling up the top 10 is The Bahamas. 

The body of Americans looking to own a home abroad has been growing steadily in recent years, in light of a relatively stable USD. Between 2015 and 2016, the number of Americans who had shown interest with their real estate agent in owning a home abroad more than doubled from 6% to 14%. 

The low value of the Mexican Peso since Donald Trump's inauguration has given Americans greater purchasing power below the border, which, alongside the relatively low cost of land, makes Mexico an attractive option. 

Mexican house prices are also far lower in comparison to the United States or in Europe, especially for beach front properties. Whilst returns on investments in Mexico are considered lower than on properties in North America, rental prices are also driving demand.

Mexico named best foreign country for American real estate investments

The research shows that for American investors, standard of living is one of the most important factors. The outcome of the survey highlights that having the financial means to invest and having solid investment plans in place are both important for US citizens before making decisions on where to put their money. 

It is not identified in the study exactly where US investors are heading to in Mexico, Costa Rica or Panama, but due to the costal nature of each of the Central American nations, the beach and warm weather are to be a likely drawcard. Spain, Italy and France also make their way into the top ten destinations identified in the 2018 survey. 

CEO of WIRE Consulting Angelo Cinel commented: "Economic, fiscal, political, and cultural factors weigh just as much as price points. The client therefore needs to identify a unique partner who is competent and who can meet any specific request. This is why we have brought WIRE Consulting to the American market as a way to directly support this clientele in their investment choices in the Real Estate sector at an international level.”

Wire Consulting is a Venice, Italy based real estate consulting company that specialises in worldwide investment in real estate. The company helps families, individuals and companies to invest and acquire property for both private and commercial purposes. Wire Consulting has specialist consultants in the US, Brazil, UK, Germany, France, Italy, Spain and Greece.

NAFTA agreement to boost investment in Mexico by 25% in some sectors

11 September 2018 Consultancy.lat

If the United States, Canada and Mexico come to an agreement in the coming days, weeks or months over the revised North American Free Trade Deal, Mexico stands to benefit significantly from increased investment. The stakes however are high, as 30% of Mexican exports could be subject to US tariffs according to Lyman Daniels, president of CBRE Mexico.

The trilateral NAFTA agreement has been a source of contention and mystery within North America since the election of President Donald Trump. The US President took the free trade agreement off the chopping board last month, agreeing to renegotiate rather than drop the axe. However, the President’s initiative is to have the deal signed and sealed by the time ALMO steps into office in Mexico DF. 

The US position has been aggressive from the start. Demanding that the Mexicans and the Canadians fall into line, Trump said that an agreement will only be reached if its “totally on our terms”. For the Mexicans, this means giving concessions on the auto-industry in terms of parts, manufacturing and wages – all intending to increase trade for the US. 

A deal was reached last week between Mexico and the US with the threat of leaving Canada out in the cold. The revamped trade deal – if it goes ahead without the US’s northern neighbour – would see the US keep its initial FTA with Canada whilst establishing a new bilateral trade agreement with Mexico. For the Mexicans, this would mean tariffs being established on roughly 10% of their trade with Canada. 

“There are things that we don’t control, particularly the political relationship between Canada and the U.S., and we definitely don’t want to expose Mexico to the uncertainty of not having a deal,” said Luis Videgaray Caso, Mexico’s foreign minister in response to the dispute. “Not having a trade agreement with the U.S., that’s a substantial risk to the Mexican economy. Literally millions of jobs in Mexico depend on access to the U.S. market.”

On the other hand, if the trilateral agreement is reached then there will be an air of clarity surrounding Mexico, including a period of reactive planning and investments driven by the stability of a trade agenda. The policies of the incoming Mexican government will not be juxtaposed by, but driven through the renegotiation. 

NAFTA agreement to boost investment in Mexico by 25% in some sectors

“It will be more a moment of planning than of caution, since we remember how the investments which were stopped were those made in a medium to long term horizon, and of course, a greater certainty and clarity of the new policies of the new government. They would encourage investment,” said Lyman Daniels, president of CBRE Mexico.

CBRE Mexico is a real estate and investment consulting firm which is headquartered in Los Angeles but operates globally. The firm has offices scattered across Latin America and the Caribbean including in Mexico City. The consulting firm featured in Expansión Magazine’s 500 Most Important Mexican Businesses last year. 

Daniels said that the economic impact of a favorable treaty is very positive and sends a message of optimism between Mexico and the United States to the market. In a sense, when the world is grappling with an impending trade war, it makes good business sense for all. “We could see in the following year an increase of up to 25% in the number of companies making new expansions and investments,” said Daniels in reference to the real estate market. 

In the north of the country – where projects stopped due to market volatility and uncertainty over the deal – Daniels contends that investment could boom by up to 40%. He states that this is an enormous opportunity which will need government investment as well as support for innovation and development. He argues that Mexico must play its cards right to ensure stability in its own economy and of the benefits of a returning manufacturing industry.

“Another key aspect of the signal change in the market is that the manufacturing industry could resume its role as an engine of industrial real estate demand the following year, a place that the logistics industry took over the entire period of NAFTA negotiation. Distribution as well, without doubt, confidence is renewed and that drives the two segments that were most affected by the uncertainty,” concludes Daniels.