Mexico, country where more proptech operate in Latin America: IDB

Given the inefficiencies that exist in the real-estate markettechnology companies in this sector, known as proptech, seek to consolidate themselves as an option to combat the housing deficit. In this sense, it is estimated that Mexico is the country where real estate startup operate in the Latin American region.

In the recent study PropTech in Latin America and the Caribbean of the Inter-American Development Bank (IDB), it is detailed that in Mexico there are 77 statups proptechabove Brazil where 66 operate and Colombia, a country that has 51 platforms in operation.

According to the analysis, Mexico is an attractive country for Latin American and Caribbean (LAC) platforms because it is seen as a strategic point for their internationalization, especially in Spanish-speaking countries.

“Although Brazil is the largest market in the region, with a total population of 212.6 million (people), due to language barriers, Mexico seems to be a more attractive destination for the internationalization of Spanish-speaking LAC companies” , highlights the analysis, which emphasizes that it is not intended to be exhaustive or representative of the ecosystem, but it does present an overview of the progress of these technologies in this area of ​​the world.

In this context, the report states that Brazil is the country in the region where more startupswith a record of 56 platforms, followed by Mexico, with 55, and Colombia, with 38.

“Throughout the region, the housing market is experiencing innovation, with some nations developing strong local ecosystems and a drive for the development of proptech solutions“, says the report.

fight the deficit

The IDB document highlights the importance of technological solutions in a market plagued by inefficiencies, including complex and bureaucratic processes, asymmetric information, and high barriers to entry.

“Due to the mismatch between supply and demand and limited affordability, the housing shortage and informal markets arise,” says the document on the perspective of the housing market in LAC.

Given this scenario, the analysis highlights that the proptech solutions They begin to have greater relevance in aspects such as:

• Purchase and sale of living place.
• rental of living place.
• Housing design.
• Financing.
• administration.
• Property marketing.

For example, in aspects such as the sale of a property, on average it takes 360 days to finalize an operation in LAC, while, in terms of financing, the average is 90 days to obtain the approval of a mortgage loan.

“These time-consuming processes caused by information asymmetries, complex paperwork requirements, and slow bureaucracy hamper real estate owners across the region. Migrating to technology-enabled processes can increase transparency and speed in real estate transactions.” , points to the document.

The report also highlights that while the world is currently facing a global crisis of living placewhere more than 1,000 million people find themselves in a situation of housing backwardness, there are risk factors that deepen in the region of Latin America and the Caribbean.

“Expand the accessibility to housing quality, affordable and resilient through innovative models is an opportunity to address both types of deficits in the region,” he details.

According to the report, from a sample of 233 proptech companies operating in the region, 110 operate in the home buying and selling segment; 51 in the land, construction and infrastructure market; 34 in administrative management and home improvements; 20 in the real estate investment activity and 18 in the rental area.

“As these new companies grow and gain market share, they can expand into solutions for affordable housing. In this process, a challenge faced by these actors is to understand and segment the needs of lower-income populations and their main housing challenges,” the analysis points out.