Nationwide house price index rose by 1.79% during 2020, a slowdown from y-o-y growth of 4.58% in 2019 and 4.32% in 2018. On a quarterly basis, house prices increased by a minuscule 0.43% during the latest quarter. For a decade the housing market has hardly moved. In 2009, house prices rose 0.77% (inflation-adjusted), in 2010 they fell 0.59%, in 2011 + 2.37%, in 2012 -1.15%, in 2013 + 0.39%, in 2014 + 0.84%, in 2015 + 4.36%, in 2016 + 4.07%, and in 2017 +0.73%, all inflation-adjusted. Mexico’s real estate market has been buoyed by strong demand in resort communities, according to the International Consortium of Real Estate Associations (ICREA). American and Canadian buyers are returning to Mexico, after a several-year slump.
Mexico’s rising middle class also continues to boost the housing market. The country’s middle class was estimated to account for almost half of the total households, at 14.6 million. They are expected to continue growing, with about 3.8 million more households projected to move into the middle class by 2030. However, the ongoing pandemic is causing a slowdown in demand and house price increases. Mexican economy tumbled by 8.5% last year in a seasonally-adjusted terms, its biggest annual contraction since the 1930s, according to the National Institute of Statistics and Geography (INEGI). Now the ailing economy faces fresh headwinds due to a resurgence in coronavirus infections. In February 2021, the central bank Banco de Mexico (Banxico) cut its key rate by 25 basis points to 4%, following eleven consecutive rate cuts in the past eighteen months, in an effort to contain the impact of the COVID-19 pandemic and plunging oil prices. Mexico’s economy is projected to grow by 4.3% this year, according to the International Monetary Fund (IMF).