In spite of its push to provide quality health care for all Mexican citizens, Mexico has an ambitious 2010 budget with a slogan that Mexico will spend less on anything that is not essential, and will not allocate more than absolutely necessary on those things the country must have. Some are saying that budgets for infrastructure could be cut as much as 50%. However, the Mexican Government says that most of their cuts will come within government itself. Three Cabinet posts are being merged into other departments, and obsolete jobs are being terminated. Workers who quit, die or retire are not being replaced. The total savings is expected to be approximately $218 billion pesos (about $17 billion USD).

Where this information becomes of value to the potential real estate investor lies in the details. Approximately 5% of the cost cutting measures will come in the form of reduced services and fewer investments in infrastructure. This means that a number of historical buildings will have to wait for another day to be remodeled. It also means that some outlying roads will not be repaired or replaced “at the present time.” This is not, however, forever and, ultimately, the forward motion of the quite healthy Mexican economy will pull these infrastructure projects back into play.

But how does the Mexican budget affect the ordinary real estate investor? Well, that depends on whether one is a buyer, a seller, or someone who just purchased a piece of property that is beyond the end of a good road.

If you are in the group that purchased a lot or home that is past the end of good roads, and paid a little more because you were told the new road would be along soon, try not to blame your real estate agent. No one knew that a global recession was coming. In the end, the new roads will come, just not in 2010.

If you are in the group that is trying to sell a piece of property that is past the end of good roads, you will probably not get the price of your dreams until at least 2011, when spending on infrastructure is expected to ease up a little. In the meantime, remember that your property is still a good investment. These property owners can either live at the property themselves or rent it and enjoy the extra money until the new road comes.

Those who are in the proverbial “cat-bird seat” here are the potential buyers. They should immediately go straight to their favorite tourist or retirement destination. Go to the end of the good road. Drive on for 15 minutes. Anything from that point back to the end of the good road is going to be one of the best investments in Mexico. New roads are coming, just not today or next year. By the time the new roads do arrive, these savvy investors will have their dream home bought and paid for at pre-new road prices. If they then want to sell it, they will get top dollar. If they want to keep it forever, there is something that is just exhilarating about knowing one has gotten the best deal around.

(source: El Periodico de Mexico)