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Saturday January 20 2018
Cancun, Main Destination for Residential Housing
Author:
Softec, Gabriela Cano


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Cancun and the Mayan Riviera have become one of the main tourist destinations in Mexico, holding approximately 20% of the country's hotel infrastructure, with grand luxury hotels, large restaurants, night clubs, and a great number of tourist attractions, such as golf courses, marinas, public and private beaches, shopping centers, and yacht clubs, in addition to splendid landscapes, which have positioned it worldwide.

Founded in 1974, Cancun was the result of combined efforts from the government and the private sector to create a new tourist destination; to date, growth has spread throughout the Mayan Riviera, mainly in Playa del Carmen, the head of the Solidaridad, Quintana Roo, municipality.

The fast growth of the city of Cancun in the ‘80s and ‘90s hinted at a possible deterioration in quality of life, so the urban reorganization of this city was an urgent priority. Fonatur’s land bank made it possible to integrate all the needs of a great, modern city.

The construction business has taken its place among the most profitable ones in the state, representing a key point for suppliers within the sector.

The city is practically split into two sections: the resort (tourist) area, and the urban area. The former is limited by the Caribbean Sea and the Nichupte Lagoon on Kukulcan Blvd. The central area has shown strong growth in infrastructure and equipping, with important shopping malls, educational, healthcare, and corporate centers entering the market.

Real estate situation

During 2010, in the tourist destinations analyzed by Softec, including Cancun and the Mayan Riviera, Vallarta, Ensenada/Rosarito, Acapulco, Puerto Peñasco, Los Cabos, Mazatlan, Ixtapa, San Miguel de Allende, La Paz, and Loreto, close to 4,000 units of Residential Plus product were sold (over USD$300,000). Cancun represented 13% of sales, settling only below Puerto Vallarta.

Historically, the development of housing for the Residential Plus segment was found in the city’s resort area, on Kukulcan Blvd., towards the Punta Sam area, with mainly ocean view apartment complexes; currently, due to the lack of land, growth has spread towards areas such as Puerto Cancun, the Cancun Seafront, and Lomas de Vista Hermosa.

Softec has identified 30 housing projects for this segment in Cancun, adding roughly 2,000 units to the market, 30% of which are on inventory. The supply is concentrated in areas such as Puerto Cancun and the resort area.

The projects located in the resort area represent 32% of the current inventory, offering product type in the range from 200 m2 to 400 m2 and average prices of USD $480,000.

Overall, a total of 25 units are sold per month; in the last few years, the market suffered a reduction due to economic crises and the influenza outbreak, which drastically affected the tourist market.

A recovery of the market is expected for mid 2011 but, given the current situation, it is important to be fully acquainted with the market’s situation, to know what the competition is doing, and what clients want.

Cancun will continue to be one of the main growth poles for Tourist Residential housing, thanks to its advantages in both infrastructure and environment.

Cancun and the Mayan Riviera currently hold around 163 house, apartment, and villa projects, ranging from the Social to the Residential Plus segments, and totaling close to 28,300 units, 40% of which are on inventory.

For the Middle segment, there are 21 ongoing developments, totaling 3,400 houses and apartments, with an inventory of 2 thousand units. For this segment, complexes are generally closed, offering green areas, surveillance, and security; some have playgrounds for children, palm shelters, and swimming pools. In general, the homes are delivered fully finished. Average price levels are in the $460,000 to $1,130,000 pesos, with average prices per m2 of $7,300, and product with a built surface area of 87m2 for apartments and 113m2 for houses. The rate of monthly sales is in the average range of 5 units per month, reaching a maximum level of 15 units; this varies based on location, amenities in the complex, and architectural design

Residential projects, located mainly in the center part of Cancun and in the center neighborhoods of Playa del Carmen, offer green areas, swimming pools, gym, multiple purpose hall, and sports courts, in addition to exclusivity and security. The homes are delivered with top-quality finishes. The highlight are developments that offer common grounds, such as a swimming pool, palm shelter, spa, gym, kids’ playground, and mini golf. Average price levels for this segment are in the $1,100,000 to $3,700,000 pesos, with average prices per m2 of $13,800 pesos; built surface areas for apartments are around 130m2, whereas for houses the average areas are of 180m2. Due to the price levels, average absorption—that is, monthly sales—are around 2 to 3 houses per month.

Residential Plus housing is located in the resort area within exclusive developments, such as Playacar, and in areas with an ocean view. Prices offered are currently in the range of $2,500,000 to $8,000,000 pesos on average, based on location, amenities, and finishes. Roughly 88% of the supply is in apartment complexes, with average areas in the 100m2 to 300m2 range, selling mainly on the oceanfront or with the most exclusive amenities. We should note that, in Playa del Carmen, this type of housing has greatly increased its presence in recent years, with apartment complexes located close to the Fifth Avenue.

It is estimated that the growth of Cancun and the Mayan Riviera will continue to follow this trend, with rising sales levels and a strong price curve; thus, efforts must be made in urban planning, promoting the required investments and considering the growth towards localities such as Puerto Morelos, among others, located on the Riviera, as well as the conurbation of Isla Mujeres.

 

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