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• Political Structure
• Economic Structure
• Market Geography
• Steps To Buying Real Estate In Mexico
• Step 1: Finding the Right Property
• Step 2: Making an Offer
• Step 3: Due Diligence and Obtaining Proper Documentation
• Step 4: Payment
• Step 5: Closing
• Closing Costs
• Tax Issues
• Contact a Mexico Realtor

Economic Structure

MEXICO’S ECONOMIC INDICATORS AND PROFILE

The following economic factors demonstrate an optimistic outlook for real estate investing in Mexico:

• Annual GDP growth is at 4-5%.
• Foreign direct investment (FDI) is rising steadily and totaled $16 billion in 2004.
• Annual inflation is at a practical rate of 3-4%.
• Mexico’s income per capita rate of $6,770 is the highest in Latin America, thereby making it a middle-income country.
• Institutional investors including California’s public pension fund, Calpers, are investing in Mexico real estate through mutual funds.
• Mexico bonds are included in JP Morgan’s Government Bond Index favored by institutional investors and both Standard and Poor’s and Moody’s rate Mexico’s sovereign debt as investment grade.
• Although Mexico experienced an extraordinary devaluation of fifty percent within a matter of days in 1994, the peso has regained its value and has remained steady since.  Most importantly, the USA assisted in stabilizing the peso during the monetary crisis and would likely do so again.

MEXICO’S LEADING SECTORS AND MARKETS

Mexico’s leading markets include: Industrial production, tourism, oil, agriculture, mining, and minerals.  Mexico’s leading sources of foreign revenue include: Workers’ remittances, tourism, oil, and manufacturing.

NAFTA

Mexico has twelve free trade agreements and is currently under negotiations with other countries.  One of the most important agreements is the enactment of NAFTA.

NAFTA established a continent-wide free-trade zone consisting of 439 million people and a combined GDP of $14 trillion.  Foreign investment in Mexico has grown to more than $16 billion a year since its enactment.  Additionally, Mexico has one of the top ten best performing stock markets world wide because of the increasing flow of foreign capital into the stock market.  It has also reduced the annual inflation rate to an average of three to four percent.

NAFTA allows free profit repatriation by firms in the USA and Canada.  Excluding the energy sector, it also requires removal of limitations on foreign investment.  Further, barriers to banking and securities have also been abolished.

BANKING

Some developments include:

• Stewart Title Mexico is the leading firm that offers escrow services and title insurance
• AIG United Guaranty and GE Financial, U.S. mortgage companies, have agreements with Mexico’s Federal Mortgage Society, SHF.  SHF is a government-backed agency whose purpose is to develop a secondary market for mortgage debt and to promote home lending.  Backed by these financial companies, SHF offers banks insurance against non-payment of mortgage debt.
• Although SHF is the only entity permitted by law to sell mortgage insurance, the entrance of foreign financial companies such as AIG, Stewart Title Mexico, and GE have helped push the further development of mortgage lending