Investing in Mexico
Good News – we’ve just revised this page and inspite of everything that’s happened in the past 18 months – Mexico is STILL a great place to invest.
Mexico is about 25% the size of the USA with an area of 758,400 square miles and consists of the federal district of Mexico City plus 31 states.
Most foreign real estate buyers come from the USA with Canada a close second, and other parts of Latin America coming in third place, though interested buyers from the European Union are quickly gaining ground.
- Mexico’s Annual GDP growth is between 3-4% and the Economist Magazine predicts similar growth for the next 5 years. 2008 growth was 3.2%, but this number should be considered in light of the world economic situation.
- Foreign direct investment totaled 18.8 billion in 2005, topped 20 billion in 2006, and figures for 2008 will be doubtless not show the same increase due to the global economic crisis.
- Annual inflation is at a practical rate of 5.2% in spite of the crisis.
- Mexico’s income per capita rate of $14,932 (2009 est.) is the highest in Latin America, thereby making it a middle-income country.
- Mexico is the tenth largest economy in the world.
- Mexico bonds are included in JP Morgan’s Government Bond Index favored by institutional investors and both Standard and Poor’s and Moody’s rate Mexico’s sovereign debt as investment grade.
- Mexico represents both a solid long term investment opportunity to the real estate buyer seeking underlying price growth and a good short term opportunity for the property investor interested in drawing down a strong income from rental rates.
- The opportunity for sustainable and strong long term price growth is built on the fact that the Mexican government is working consistently to strengthen and broaden their economy and also because the demand for property for sale in Mexico from overseas buyers is intensifying annually.
- In terms of the tourism market, Mexico receives around 22.3 million international visitors a year and of those an estimated 300,000 to 500,000 Americans and Canadians take extended holidays. This figure is not only rising but substantially supplemented by long staying visitors from Europe and the UK. A large percentage of all visitors seek accommodation to rent out on a weekly basis and this form of short term renting reaps the highest rental income.
Leading Sectors & Markets
Mexico’s leading markets include:
- Industrial production
- Tourism
- Energy
- Agriculture
- Mining and minerals.
Mexico’s leading sources of foreign revenue include: Tourism, energy, and manufacturing.
NAFTA
NAFTA established a continent-wide free-trade zone consisting of 439 million people and a combined GDP of $14 trillion. Mexico has one of the top 10 best performing stock markets world wide because of the increasing flow of foreign capital into the stock market. Mexico has reduced its annual inflation rate to an average of 3-4%. With 12 international free trade agreements and several more in negotiation now, Mexico’s largest trade partner remains the United States. Mexico is the second largest trading partner for the US and 3rd largest for Canada.
