A construction boom led by high-rise towers is under way in Guadalajara, Jalisco, and most indications are that both investment and prices — along with more tall buildings — will only continue to go up.
According to industry experts, there are currently about 100 residential and office towers that are either being built or in the planning stage. The area of Zapopan, about 10 kilometers west of Guadalajara’s downtown, is leading the way.
The president of the Mexican Association of Real Estate Professionals’ (AMPI) western branch attributes the boom to a trend towards high-density developments.
“Guadalajara is among the top three places for real estate investment because investors from different parts of the country see . . . an opportunity because of re-densification and the rise of verticality,” Rosa Celina Ruiz Velasco said.
She added that for every three new high-rises, one is a mixed-use development that combines commercial, housing and office space or even a hotel.
The Real Estate Developers’ Association (ADI) said that companies affiliated with the group are currently working on around 30 projects in the city and investment is higher than anticipated.
“The commitment of ADI with Mexico was to invest US $21 billion in five years at a national level; of that US $5 billion was for ADI western Mexico. Now we’ve exceeded that figure and we’re at US $30 billion at a national level and here it has increased to US $6 billion,” said Gustavo Núñez, a vice-president of the ADI western division.
Another AMPI member said that policies that promote high-rise developments are even bringing tall apartment blocks to working-class districts of the city where they previously didn’t exist.
“. . . now we see apartment towers in the Tetlán area, in San Andrés and there are going to be more apartments of this type in the range of 750,000 pesos [US $41,000] to 1.25 million pesos [US $68,500] . . . .” Francisco Diaz de León said.
Those prices, however, are well below the average cost of apartments that have been sold in the metropolitan area this year, according to real estate website Lamudi.
Its data shows that the average price of an apartment in the first half of 2017 was just shy of 3.3 million pesos (US $180,000), up 27% over last year. Prices in some areas of the city such as the historic center and the Zona Real area of Zapopan have risen at even higher rates.
Greater investor interest has driven up the cost of land and with a rise in the cost of construction materials, apartment prices are higher as well, Ruiz Velasco said.
While the construction boom is good news for the economy and investors, some local residents may not be so happy about the proliferation of towering residential blocks, according to Diaz de León.
He believes that the arrival of high-rise apartment buildings could negatively affect the value of adjoining lower-density properties because they impinge on people’s privacy.
“. . . people don’t feel comfortable about having a neighbor on one side but [now] they may have 200 to 300 . . . .” he said.
But according to the director of one large development firm, a growing demographic of young families is going to continue to fuel the demand for high-rise apartments in the city, meaning that for real estate investors and construction companies, the sky is quite literally the limit.
Source: Milenio (sp)