TLÁLOC PUGA

—cartera@eluniversal.com.mx

Houses and apartments have doubled in price since the beginning of President Andrés Manuel López Obrador's administration, as explained by analysts to EL UNIVERSAL, due to the growing demand, scarcity of construction materials, and reduced placement of affordable housing.

Throughout the country, homes with mortgage credit had an average price of 1,602,000 pesos between January and March of this year.

This represents twice the price at the end of 2018 when the current government started, and the average was 805,000 pesos, according to data from the Federal Mortgage Society (SHF).

The increase is attributed to the historical housing shortage in the country and the recent scarcity of construction materials such as steel, aluminum, glass, and cement, explained Fernando Soto-Hay, founder, and CEO of TuHipoteca Fácil, a company specializing in mortgage advisory services. Additionally, he pointed out that costs were adjusted after the Covid-19 pandemic due to teleworking and an increased appreciation of housing by users compared to before the health crisis.

"The profiles of constructed housing have changed, as developers now focus on offering better-ventilated housing, balconies, and green areas. People have realized the importance of owning their own house or apartment, which increased the desire to buy housing and its value," commented Soto-Hay.

From their perspective, the scarcity of housing and the lack of investment projects will continue to appreciate these properties in the coming years. Real Estate analyst at Propiedades.com, Leonardo González, agreed that housing prices will continue to rise. "Prices will show a persistent increase due to the housing deficit, significant housing backlog, the involvement of millennials in the market, as well as the increased participation of women in the labor market, as they have more capacity to take out mortgages, resulting in additional demand for properties," he explained. He also highlighted that cement, steel, rebar, and other materials have increased in price more than inflation, which reflects in the final price.

Affordable segment

Leonardo González pointed out that there is a contraction in the supply of houses and apartments, especially in the social housing segment, which has consolidated the middle segments. In March, private banks reduced 4.2% of credit for social housing, according to information from the Bank of Mexico (Banxico). Financing for affordable housing has been decreasing for almost eight years in a row, as loans have continued to decline since August 2015, not keeping up with inflation.

From the perspective of Jorge Paredes, president of the real estate company Realty World México, the placement of affordable housing began to decrease in the mid-term of former President Enrique Peña Nieto's administration due to the elimination of subsidies for acquiring these properties among the lowest economic strata of the population. Paredes also highlighted the increased cost of both land and inputs for building houses and apartments, as well as municipal regulations that have made the development of new real estate projects for the social housing segment in Mexico expensive and slow.

The program that concentrated subsidies for housing, administered by the National Housing Commission (Conavi), was reduced to less than half at the beginning of the current government. On the other hand, Leonardo González pointed out that there is a backlog of about 9 million homes in the country, which significantly influences demand and the housing stock required by the population. Even though salaries have improved, there is less accessibility to housing due to its prices.

The national office of UN-Habitat revealed that housing produced in Mexico is unaffordable for nearly 40% of the population. Only 15% of Mexicans have the possibility of acquiring a property without allocating more than 30% of their income to the mortgage payment, that is, without compromising the enjoyment of other rights due to excessive housing costs. The Federal Mortgage Society foresees that the entities with the highest demand for credits to purchase new and existing housing this year will be Nuevo León, Jalisco, the State of Mexico, and Mexico City.

Special thanks to: El Universal and Tláloc Puga.