An article by the travel news site 4 Hoteliers, pointed out several good indicators of a sunny forecast for Mexico real estate.

Increasing Trend of Foreign Investment

Private investment in Mexico tourism was approximately $3.5 billion USD in 2007, up 11.1% for the year, while sales of tourist housing was 18,000 units, an increase of 52.5% over the previous year. Condominium construction has outpaced hotel construction for the second year in a row.

Mexico’s Regulatory Framework is Favorable to Foreign Investment

It is in Mexico’s best interest to encourage foreign Investment in tourism and residential development. Mexico’s law allows 100% ownership of Mexican corporations by foreign entities and unrestricted repatriation of profits, bonuses, dividends, and interest payments. The government also provides some legal guarantees to protect foreign investors.

Established Markets Still Growing

Puerto Vallarta was the leader in housing sales, and the article also noted Los Cabos, Puerto Peñasco, Acapulco, Cancún, Riviera Nayarit, and Playa del Carmen as having significant investment activity.

Tie to US Economy Might Cause Short Term Slow Down

With the US being the number one investor in Mexico real estate, the US slowdown may cause American investors to be more hesitant to invest in new developments. It is also becoming more difficult to acquire financing due to the US credit crunch, which could stifle demand. Spain and the US, accounted for 43.76% of the total of private tourism investment in Mexico.

Despite signs of a possible slow down of the Mexico real estate market in the short-term, the general consensus is that Mexico’s outlook is very rosy in the long-term with many attractive opportunities.

Source: “Investment in Mexico” 4 Hoteliers