14 August 2008 293 views No Comment

Often when the housing sector is booming one of the benefactors are home improvement retailers. Home Depot has been thriving in Mexico since they opened their first stores in 2001. Since that time they have grown to 69 stores and over $1 billion in sales according to a story in the Atlanta Journal-Constitution. In March, Home Depot announced the construction of a $28 million dollar distribution center in Hidalgo and plans to open 9 new stores this year. Home Depot’s strong performance in Mexico is a sign of the current growth in Mexico’s housing sector. Their plans to expand further shows confidence that Mexico’s housing sector will continue this growth.

It has been well documented that Mexico has a significant shortage in their supply of homes that is estimated to be around 4 million. President Calderon has placed emphasis on increasing the housing supply with a goals of providing 1 million home loans per year and construction of 16 million new homes by 2030, which would nearly double the current stock of homes in Mexico. Home loans that have not been common in Mexico until very recently, allow easier access to home ownership to Mexicans who can afford it. This in combination with growing demand from US baby boomers and we may see a housing crisis that unlike in the US, will send prices skyrocketing in the future. Home Depot is counting on sustained demand for homes and hopes that a housing boom in Mexico will reduce the effect of their slumping US business.

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