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Are U.S. Expats Driving Up Housing Prices in Mexico?

Mexico City – More Americans seeking their dreams are now forced to look beyond the 2,000-mile (3,218 kilometer) border with Mexico because of the coronavirus pandemic and inflation.

Their journeys, however, some believe, carry consequences for their neighbors to the south.

With U.S. politicians pushing for stricter migrant control and Mexican nationals looking for better living conditions on U.S. soil, migration has been an uncomfortable link for the two North American neighbors.

With the effects of the pandemic and the inflationary crisis, caused in part by the war in Ukraine, migration have grown exponentially.

According to the Migration and Remittances Yearbook of 2022 by Consejo Nacional de Población (CONAPO) and BBVA research, the number of Mexican migrants in the United States increased 400,000 in 2021.

And the number of US migrants has reportedly grown since the pandemic in 2020, stemming from a greater purchasing power and better economic conditions than their Mexican counterparts.

By 2020, the number of US expats living in Mexico amounted to 797,266, according to Mexico’s National Institute of Statistics and Geography. That number grew significantly, with the US State Department reporting that by late 2021, there were 1.6 million living in Mexico.

“One of the driving factors for people to relocate completely is to live in a less stressful environment,” Taniel Chemsian, a US real estate agent who has lived on Mexico’s western coast for 16 years, told Anadolu Agency. “The political realm of the US since (former President Donald) Trump went in has been disgusting. People are fed up. They are sick of the politics and when you add the high cost of living, no one is happy.”

He said Americans cannot afford to live in their country. “The cost of living has skyrocketed, inflation has gone to the roof in the last 18 months. People are looking at other places to relocate to, and I think Mexico strategically is in the right spot,” he said.

A lower cost of living has made Mexico the main target for US expats. The UN Department of Economic and Social Affairs said Mexico is the number one destination for Americans planning to move abroad.

Destinations for Americans

Mexico’s last census in 2020 offers details as to where the leading destinations are for Americans.

The northern state of Baja California is an obvious choice since it borders the US state of California, followed by Mexico City and the state of Jalisco, where Chemsian lives. Attracted to warm weather and stunning beaches, Americans seem to gravitate to the western coast.

The demand for property amongst the American and Canadian populations is so high that there is not enough housing to meet the demand, according to Chemsian.

“After coming out of recession (2009), we started having younger buyers, people in their 30s and 40s buying investment homes (in Puerto Vallarta), and in the past six years, I’ve seen a huge surge in young people buying,” he said.

The small city of Puerto Vallarta in Jalisco has surpassed the popularity of more well-known destinations such as Cancun or Cabo, offering foreigners and wealthy nationals deluxe condos to retain as investments rather than homes, said Chemsian.

Chuck Bolotin and his wife migrated from the US to Jalisco in 2016. For the past three years, he has helped other Americans relocate to Mexico.

“We have more clients that we can handle. Last year, we helped move 117 families,” he said.

While it is debatable if gentrification is a direct result of foreign investors coming to Mexico, the experience of Bolotin and Chemsian indicate that there might be a correlation.

“It seems like there are many more (US citizens) living in Mexico because the prices in the areas where gringos buy houses or rent houses have gone up significantly just in the last couple of years – maybe 20% or more, and the reason they went up is because there are more gringos that want to live here,” said Bolotin, referring to a local name for Americans.

Prices rising

Zona Romantica in Puerto Vallarta, one of the neighborhoods with a high demand for western expats, prices for pre-construction condos have risen considerably.

Chemsian said properties there used to be valued at more than $360,000 in 2020. But prices for the same condos this year are nearly $428,000, an increase of more than 17%.

In contrast, most Mexicans receive a monthly income of around $400, putting the purchasing or leasing of those properties out of reach.

“It’s very complicated,” an American woman who has lived in Mexico City for the past five years told Anadolu Agency on condition of anonymity.

“I think a lot of foreigners who moved here aren’t conscious, nor do they think about such issues,” she said, referring to the effects on housing prices from native residents.

“I think that an article should hold foreigners accountable because many foreigners are doing more harm than good,” she said.

Source: Anadolu Agency

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