Citibank’s Banamex, ABN Amro and Bancomer have recently targeted the mortgage lending market as an area for key growth. Their entrance signifies an opportunity to consolidate the system and offer consumers a more diversified and competitive product mix.
NAHB International: What types of builders are doing business in Mexico today?
Aguirre: In Mexico, large integrated home builders that focus on the affordable and entry level homes have the most sales volume. The 10 largest builders in Mexico account for about $3 billion of the almost $13 billion housing market. However, the middle market is returning, and with it are smaller builders and developers focusing on the high-end and retirement homes. They will probably be important players in the near future.
NAHB International: Describe Mexico’s low, middle and high markets for our members.
Aguirre: The housing market in Mexico actually is divided into six classifications according to price. From lowest to highest they are:
- Minimum
- Social
- Economic
- Middle
- Residential
- Residential plus
Two-thirds of Mexico’s housing stock consists of homes that are at the lowest price ranges; however, half of the housing stock value is concentrated in the higher-end housing segments in the residential and residential plus markets. Interestingly, these are the market segments that are growing most rapidly.
About half of all new housing (close to 300,000 units per year) is self-built. Another 300,000 homes are built by developers, and most of these homes are in the economic or low market segment. The middle, residential and higher-end market (residential plus) are all smaller segments of the market.
Most developer-built construction occurs in the cities. Typically, the homes in the economic segment range from $20,000-$40,000. For the middle and residential markets, homes prices are in the $40,000-$220,000 range, and homes in the residential plus market are $220,000 and up.
NAHB International: What types of homes do Mexican consumers prefer?
Aguirre: Typically, the traditional Mexican home is made of brick, block and mortar. Mexican consumers prefer a very durable and permanent structure. Little wood is used, and when it is, it is in high-end homes and only as a decorative element. Stick-built homes are rare in Mexico.
NAHB International: Why did NAHB and CANADEVI sign a partnership agreement at the Partnership for Prosperity meeting in Guadalajara, Mexico?
Aguirre: Both Bobby Rayburn and I recognize that our established housing associations share common goals and objectives in the service of our members. The NAHB/CANADEVI agreement reflects our associations’ intentions to work together to exchange ideas, information and innovations in the housing sector.
NAHB International: What steps should our NAHB builder-members take before entering into the Mexican housing market?
Aguirre: Become informed, get to know the players, find a partner and establish a successful business relationship.
An excellent first step would be to attend The 2nd International Housing Conference of the Americas in Mexico City on Nov. 7-10. The NAHB/CANADEVI conference brings U.S. and Mexican builders and suppliers together where they will have the opportunity to participate in a variety of activities including: educational panels, property tours to four of Mexico’s largest developers and one-on-one networking meetings.
Editor’s note: NAHB and CANADEVI members can receive a discounted rate for The 2nd International Housing Conference of the Americas. To learn more about the conference, download a brochure or register online, visit www.nahb.org/mexicoconference or contact Matt Monjan at 800 368-5242 x8419.
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