The real estate industry plans to lobby for a renewed discussion in Congress over the elimination of the bank trust foreigners must use to purchase property.
The president of the Real Estate Confederation of Latin America said removing the requirement for foreigners to buy real estate with a trust, called a fideicomiso, would detonate sales and have an impact on the entire sector.
Antonio Hánna estimated it would drive up demand by 30% in the five years following the change.
Only Mexicans by birth or naturalization, or Mexican companies, can directly own real estate within 50 kilometers of the ocean or 100 kilometers of international borders. Foreigners who wish to hold land within those areas, known as the restricted zone, must do so with a bank trust.
The buyer, who must pay an annual fee to the bank, has the right to use the property but the bank holds the title.
Sales of vacation homes and apartments totaled 1,725 last year. Remove the bank trust requirement and the number would soar to 2,423 after five years, said the confederation.
The change would require an amendment to the constitution, which is what the Mexican Association of Real Estate Agents (AMPI) lobbied for a few years ago. The proposal got as far as Congress, but became bogged down in the Senate, said AMPI president Gustavo Solares.
He, too, predicted that removing the fideicomiso requirement would detonate activity in the market.
Claudia Velázquez of the real estate consultancy Softec said that in addition to the constitutional change there was also a need to streamline the process for Mexican buyers as well. She said they represent up to 80% of the purchasers in some tourist destinations.
Tourist property sales have been improving throughout the country, Velázquez said, but it was important to remember that Mexican citizens were a strong component of the market.
Among the destinations attractive to foreign buyers, according to Federal Mortgage Society statistics, are Puerto Vallarta, where housing prices averaged 12,743 pesos (US $536) per square meter last year; Los Cabos, where prices averaged 10,830 pesos; Cancún with prices at 10,166 pesos; Acapulco, 8,939 pesos; and Puerto Escondido, 7,060 pesos.
Source: El Financiero (sp)