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The report also notes that the current housing finance system will be hard to reform without better information on a wide range of issues, including the value and legal status of the current housing stock, the payment history of its citizens, the performance of the current financing system, the supply and demand for housing and the cost of providing infrastructure.
Among other findings of the report:
- Mexico’s housing stock consists of about 24 million units worth more than 1.1 trillion pesos, or $110 billion. Less than 13% of housing units have outstanding mortgage debt and a significant store of home equity is untapped.
- The greatest demand for housing is in the country’s four largest cities — Mexico City, Monterrey, Guadalajara and Puebla — but growth in mid-sized cities along the U.S.-Mexico border and in coastal tourist areas is accelerating.
- The private sector currently provides very little capital for housing finance; most of it comes from public or publicly mandated institutions that primarily finance the sale of new homes to low-wage employees.
- The government no longer supports rental financing; about 13% of the nation’s households are renters.
- Municipal governments believe that the infrastructure costs of new housing exceed the revenue that is generated, making them unwilling to plan for and accommodate growth.
The study does note that Mexico is currently engaged in a process of reforming its housing system, which should expand the housing finance system, lead to more sources of capital (particularly private capital), more conduits through which capital can flow and a more diverse range of housing products.
“By legally selling their current home and realizing capital gains on the asset, households could obtain a downpayment on a larger, newer or otherwise preferable house (or alternately, use the liquid gains to finance current consumption),” says the report. “Currently, without the ability to assess the value of existing housing, to borrow against it or to resell it, housing wealth cannot be fully realized and households are limited in their upward and geographic mobility.”
The report was prepard for CIDOC and CONAFOVI.
Opportunities in Mexico Explored During International Housing Conference of the Americas
The 2nd International Housing Conference of the Americas will enable U.S. and Mexican companies interested in building relationships and expanding their business, to meet, learn and explore future housing opportunities in Mexico.
Sponsored by NAHB and CANADEVI (Mexico’s National Industry Chamber for the Development and Promotion of Housing), the conference is scheduled for Nov. 7-10 in Mexico City.
The conference will feature educational panels, housing tours, table top exhibits, one-on-one meetings, networking lunches and breakfasts and insight from key industry leaders and government officials. For more information or to register, click here.
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