Housing prices increased 11.7% annually in the first quarter of the year

Although the inflation In general, it has begun to subside, its effects have been reflected in various segments, such as, for example, in the price of homes in Mexico, since in the first quarter of the year the home value it increased 11.7% compared to the same period of the previous year, a historical level according to the records of Sociedad Hipotecaria Federal (SHF).

The development bank presented the SHF Housing Price Index corresponding to the first quarter of the year, where it detailed that the average price of a housing nationwide was 1 million 601,000 pesos in said period.

“The housing in Mexico it continues to be appreciated and continues to be a vehicle for equity investment,” explained Carlos Serrano, chief economist of BBVA in Mexico a few days ago, when presenting the Mexico Real Estate Outlook report for the first half of 2023.

In the report, it is highlighted that the acceleration of prices in construction costs in recent months has had an effect on the construction of new housewhich in turn generates an appreciation of the housing in general.

“It is expected that in 2023 the price of living place maintain its rate of appreciation, despite the fact that the demand begins to soften”, can be read in the report.

For Federico Sobrino, a real estate consultant, without a doubt the inflation in the materials for construction is the determining factor for the appreciation in the value of the living place in Mexico.

“An important fact is the inflation especially in all the products necessary for the construction from living placewe are talking about almost 50% in some inputs, this obviously makes the living place increase its value based on its cost of construction“, Nephew explained.

In the context of a high inflation in the prices of the materials for the constructionthe living place It has also had an important appreciation. Only in the four quarters of 2022, the annual increase was 7.7%, 8%, 9.4% and 10.4%, respectively, in order to have an annualized increase of 8.9 percent.

According to SHF, the increase in the price of living place during the first quarter of the year it occurred in a context where the GDP grew 3.9% in real terms, compared to the same period of the previous year; the number of registered workers grew 3.2%, the inflation it was 6.8% and the average mortgage rate was 11.2 percent.

Thrust of the dwellers

Along with this effect, the main homeowners in the country have raised the average amount of households that they offer, in a strategy of obtaining more income in a high inflationary environment, which has also influenced the increase in the average price of homes.

During 2022, the main developers of the country, such as Javer, Ara, Vinte and Cadu, increased the average price of their living placecompared to 2021, from 11% to 30%, according to their annual income statements.

Even for this year, some firms have stated that they continue in this trend. For example, Javer, the developer of living place most important in the country measured by the number of households commercialized, has the objective of reaching an average ticket of 700,000 pesos in this 2023, that is, an annual increase of 5.8%.

Likewise, Vinte reported that in the first quarter of the year its average price was 1 million 138,700 pesos, that is, a growth of 9.4% compared to what was reported in the same period of 2022.

“Ultimately, what marks the market is the law of supply and demand. Obviously it is working for homeowners because they are building much less and they are increasing their average ticket, but based on the little market that is resorting to the purchase of living place“, Sobrino said.

Average price

Regarding the average price of housing, it was located at 1 million 601,000 pesos. For Federico Sobrino, this value can be good or bad, depending on the area, since said value in the southeast of the country is enough for a good-sized home in good condition; however, if said value is for a home in the surroundings of Mexico City, it would be a property with less space and further from the center of the city.

According to SHF data, in the first quarter of the year, 16 entities registered increases higher than the national average, where Baja California Sur, Quintana Roo and Sinaloa led the highest annual appreciations, with 17.9%, 17.1% and 16.5%. respectively.

While another 16 entities registered variations lower than the national average, and states such as Puebla, the State of Mexico and Durango, registered the smallest increases, which were 7.5%, 6.7% and 6.4%, respectively.