The reengineering in the economic sector caused by the coronavirus has brought with it a series of changes in all areas.
In the case of the real estate market, the method of purchasing this type of space has been affected by the incorporation of the home office. But nevertheless, the search for real estate is still present.
The demand for income in the real estate sector grew by
35% in the first six months of 2020 (1).
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Real estate continues to be essential products. Therefore, we will talk about the trends and projections that lie ahead in the following months, including the projected date for the rise in the sector, the areas with the highest growth, the types of products most in demand and the new technologies that seek to satisfy current ones. residential, work, commercial and industrial life needs (1).
If you want to know more about real estate, see:
“Real estate in CDMX: guide to trends, companies and recommendations after the pandemic” .
Background of the current real estate panorama
The real estate market is one of the most important economic sectors in the country. The main context that has allowed this and other sectors to grow dates back to the North American Free Trade Agreement (NAFTA) in 1994 and its current agreement, the T-MEC (Agreement between Mexico, the United States and Canada), which entered into force in 2020.
The implementation of the T-MEC will be completed after six years of adjustments, the projection of which is determined in an increase of 0.2% of the Mexican Gross Domestic Product (GDP) (2).
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But nevertheless, the current panorama offers a complicated scenario due to the arrival of the coronavirus in different regions of the world, along with the possible economic recession in different sectors, including construction and the real estate industry.
Despite this, there has not been a significant reduction in the demand for real estate residential, commercial, corporate and / or industrial type.
If you are interested in knowing which are the most important industrial areas, check out our article:
“Industrial areas for rent in Mexico City: concepts, locations and trends” .
Real estate market demand: types of spaces
According to the 2020 Real Estate Market Report, within the behavior of the demand for real estate by subsector, we find that there is much greater interest in the residential area , followed by land, the commercial, corporate and industrial sectors (2).
In the last six months there was a significant increase in searches for almost all subsectors , minus the corporate, which has seven percentage points in the negative, due to the new extended home office practices.
The rest of the subsectors show an increase in their search ranges: industrial (76%), residential (73%), land (26%) and commercial (7%) (2).
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Regarding the modalities, we find that, by type of operation, there is a preference for the rent in a 63% , while the sale occupies a 37% (2).
If we analyze each subsector we find that the demand for commercial real estate for rent increased 14% , while sales decreased 23% , according to what was studied from November 2019 to May 2020 (2).
Remember that at Vallejo Properties we have corporate, commercial and industrial properties for rent in Mexico City and the Metropolitan Area. If you want to know more details about the locations, write us .
If you want to know more about the topic of renting commercial premises, we suggest you consult:
“Rent of commercial premises: economic activation guide” .
For its part, demand in the corporate sector decreased 2% in income , while the sale of offices increased 4% , in the same period as the commercial subsector (2).
We also have corporate complexes for rent for your company in strategic locations in Mexico City, such as the Vallejo area. Contact us to offer you the ideal space .
In the case of demand in the industrial sector, income increased 8% and sales decreased by 26% (2). In Vallejo Properties We have warehouses and industrial warehouses for your investment projects in the Vallejo industrial zone (Mexico City) and in the municipality of Tultitlán (State of Mexico).
For the demand for residences and land , the rent increased 6%, but the sale decreased by 5%, while the land amounted to 51% in rent and 22% in sale (2).
As we can see, in practically all sectors, rent has been the main operation to occupy spaces and adapt them for companies or businesses . This is an activity that is being fundamental for the economic rebound, after the contingency.
Real estate market demand: growth zones
According to the 2020 Real Estate Market Report, entities in Mexico present different percentages of demand for each subsector. For example, in the commercial area the states that stand out the most , with percentage differences between them, are (2):
- Coahuila (16%).
- Durango (13.8%).
- Zacatecas (10.2%).
- Nuevo Leon (8.5%).
- Aguascalientes (8.1%).
If corporate (of offices), the five most prominent states by the demand on the subject, with enough closeness between them, are (2):
- Mexico City (3.6%).
- Aguascalientes (3.2%).
- Tamaulipas (3.1%).
- Durango (3.0%).
- Nuevo Leon (2.9%).
At industrial sector , such as warehouses, parks or warehouses of this type, the entities have the following order , quite competitive (2):
- Zacatecas (2.6%).
- Hidalgo (2.5%).
- Durango (2.4%).
- Baja California (2.2%).
- Nuevo Leon (2.1%).
If you are interested in knowing more about the subject of wineries, you can check:
“Wineries: trends, projections and recommendations for the sector after the pandemic” .
In the case of land , which can be of different types, depending on the land use and the project line of business, we find these states, with greater differences between them (2):
- Oaxaca (33.3%).
- Baja California Sur (31.3%).
- Campeche (22.4%).
- Zacatecas (16.1%).
- Colima (14.8%).
Finally, on the topic residential , the states that stand out the most in their percentage of demand are the following (2):
- Mexico City (88.8%).
- Morelos (87.4%).
- Tabasco (87.2%).
- State of Mexico (87.1%).
- Guerrero (86.9%).
In this sense, we can summarize that Mexico City concentrates most of the residential demand, although it is closely followed by the state of Morelos.
CDMX also stands out in the corporate sector, which allows us to give an account of the relationship between the construction of work, business and corporate spaces that have been concentrated in the City; with the need to live near those offices.
If you want to know more about the corporate sector, you can read the following article:
“Office rental: trend guide and recommendations for the new normal” .
Likewise, we can highlight that the total demand for real estate in Mexico is covered mainly by 11 states, which add up to 80%: Mexico City, State of Mexico, Nuevo León, Jalisco, Querétaro, Puebla, Yucatán, Guanajuato, San Luis Potosí, Veracruz and Baja California (2).
Both in the ranking of demand for sale and for rent, the CDMX, the State of Mexico and Nuevo León (2) stand out in the first three places.
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At Vallejo Properties we have properties in the commercial, corporate and industrial sectors, located in the State of Mexico and Mexico City. If you want to know more details, Get in contact with us .
Real estate trends
The real estate sector is key to revitalizing the country’s economy. In general, the picture is that, although the real estate inventory has not grown as expected, due to the suspension of construction activities, prices have remained stable and the value of properties has been preserved (3).
One of the changes detected is that many new freelancers are emerging (3) who will seek to start their own business, renting or buying a space: from a local, a warehouse or a warehouse, depending on the commercial or industrial line.
It is also being important the creation of spaces with adaptations suitable for the new normal, that is, with ventilation and natural lighting, in addition to changes in the products of the real estate sector , as are the offices, wineries , industrial ships , commercial premises and residences (2).
If you want to know more about renting offices in Vallejo, check the article:
“Offices for rent in CDMX: areas and recommendations” .
Likewise, the digital channel that is being opened with the marketplaces for the entire real estate market is essential (2) because that allows them to stay in contact with potential clients: this way they get informed, know the complexes, can see photos and videos of the buildings and premises, and come into contact with real estate companies. In this way you can advance in the search for an ideal space for companies or businesses.
Fundamental trends in the real estate market aim to revitalize the economy through digital strategies and restructuring in the sector’s product catalog.
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For this, it is essential to contact a digital marketing agency to support you in the configuration of campaigns and content to stay current against the competition, that he has not paused his strategies at this time, but has adapted his ways to the new circumstances.
Projections of the real estate sector
The future of the real estate market demands, among other things, the professionalization and constant training of the sectorThe company’s activities are focused on areas beyond construction and finance, such as technology, the arts, social sciences and science, to better understand and respond to the changing needs of the market (4).
The first point is that real estate products will continue to be considered essential (2), so, as we have seen, the income will keep the sector in operation, which will start to float in early 2021 , according to projections (2).
The second point is that this recovery will occur depending on the area (industrial, corporate or commercial), and the area or region where it is carried out. For this, it is expected that there will be a credit investment in the subject (2).
If what you are looking for is information on the rent of commercial premises, visit our text:
“Rent of commercial premises in CDMX: costs and benefits” .
Keys of opportunity for the real estate market 2020
In the context of the current scenario it is important take into account the points of opportunity from which the real estate sector will take off , considering that some of them were already in development, even before the pandemic (5):
• The demand. As we have seen, this has not changed drastically, although the conversions for purchase / rent have not been able to materialize in many of the subsectors, the intention is still ongoing.
For this it is important to remain in communication with our clients and provide them with all the necessary information to advance in the process because, as we well know, this involves several stages.
In this sense, we can use the digital channel to continue being present. In addition, following the health protocols, we will specify the visits to the buildings again, since it is always more advisable to observe in person the spaces, locations and benefits that each property offers us.
• New real estate brokers in CDMX. The City government announced months ago the “Special Urban Regeneration and Inclusive Housing Program”.The company seeks to continue the construction of real estate complexes with residences in areas close to offices, corporations and various services, so special attention is expected to be paid to these areas.
Of course, this project can continue after the contingency and will represent a development opportunity for these real estate centers.
The main corridor that will be favored is the Vallejo industrial zone, where we have properties for your commercial, corporate and industrial needs. Contact us to learn more.
• Income as a central operation. This modality has an important market and potential, because it is an alternative that gives mobility to businesses.
As we have seen, the percentages lean towards this option, so it will be an opportunity for both investors and clients, who will seek these scenarios while the market stabilizes.
• Financing. There are different options for this issue, especially in the housing subsector, which will be more important than ever to reestablish terms and indices in the market, according to the offer of products, profiles and new consumer needs.
• Diversification of the offer. In this sense, it is expected that there will be dynamism to reorder the issue based on the new demand for safe spaces adapted to current market needs, after the pandemic, specifically in places where it is possible to carry out the tasks of sanitization, as well as healthy distance.
The keys to supply, rent, financing, demand and investment in real estate brokers will better address the transition to the new normal.
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Although the coronavirus contingency caused a contraction in some subsectors and operational dynamics of the real estate sector, This is defined as a moment of pause in the decision to buy and rent, however the intention persists , so the searches, valuations and quotes in the sector continue.
For this reason, we recommend that you stay informed of changes in the market, especially for prepare for the new stage of normality where demand will have significant challenges in the promotion and recovery of the commercial, corporate and industrial areas. Don’t get left behind and contact us to work on your next space.
References
1. Rocío Alavez. Rents boost demand in the real estate sector in Mexico. Real Estate, 2020. Retrieved August 17, 2020.
2. Lamudi.
Real Estate Market Report 2020
.
Lamudi, 2020. Retrieved August 20, 2020.
3. Emily Colmenares. Latin America, fundamental in the recovery of the real estate sector. Real Estate, 2020. Retrieved August 17, 2020.
4. Luisa Viana. Professionalization of the real estate sector in Mexico is essential. Real Estate, 2020. Retrieved August 17, 2020.
5. Tinsa. Real estate outlook 2020. Tinsa Mexico, 2020. Retrieved August 20, 2020.
