According to Softec, a lower supply of homes with a value greater than 5.3 million pesos is beginning to be detected in this market
Sun, sand and sea are factors that have made the Los Cabos housing market attractive, in Baja California Sur, especially in the higher value segments; however, as of the second half of 2022, the supply of these spaces has fallen considerably.
According to an analysis by the Softec firm, a decrease in sales has been noted in this market, as well as in the supply of homes with a value of more than 5.3 million pesos, which are classified within the residential plus segment (RP), despite the fact that it is a region highly demanded by foreigners.
“In the case of RP, sales decreased because the houses for sale also ran out and new projects have not started to renew the offer in this segment,” said César Cortés, a Softec consultant, an expert in the area.
According to data from the Single Housing Registry, during 2022 only 818 production homes were registered in Baja California Sur, which meant an annual decrease of 22.68%. Of the total number of units built the previous year, only three were from the residential segment, which, according to the classification of this organization, have a value starting at 2.1 million pesos.
In this context, during 2022 the Housing Price Index of Sociedad Hipotecaria Federal registered an annual increase in the average price of housing of 14.2% in Baja California Sur and in Los Cabos this increase was 15%, with a price average in the state of 1.6 million pesos. The average increase across the country was 8.9% over the past year.
In the case of the residential segment (R), which Softec classifies with a value of 2.4 million to 5.3 million pesos, the firm has detected a reduction in sales, but in this case there has been an increase in supply, which suggests an oversupply within this market.
“Developers who are betting on this type of housing will need new sales strategies or even production in stages, so as not to incur significant financial imbalances,” explained the specialist.
According to Cortés, the Los Cabos housing market has been characterized by the arrival of foreigners to acquire real estate in this region, since according to data from Softec, 70% of their demand comes from the United States and Canada.
For the specialist, although luxury projects are becoming increasingly scarce in the Los Cabos beach area, there is interesting potential in the San José del Cabo area.
“Although it is already a fact that new luxury housing projects have been moving away from the beach, there are still very good options for location and cost of land. We have been observing enormous potential in the San José del Cabo area, as an alternative to the projects that are being developed in areas such as Tezal, towards the Cabo San Lucas area,” said Cortés.
According to the Softec specialist, the San José del Cabo area is not yet saturated, so services such as water and electricity can be accessed. “We see a boom in the sales of luxury homes in San José del Cabo, which has the appeal of tradition. Subject to confirming this trend in future reports
Source: El Economista