The residential real estate sector in Baja California Sur, Mexico is experiencing rapid growth with demand estimated to increase more than 60% over pre-pandemic levels.
A real estate entrepreneur in the region explained, “The growth in residential real estate is a side-effect of the pandemic: remote working. Wealthy Americans are moving their residence to the peninsula and they are investing not only in construction but also in amenities: some houses are being directly connected to the US internet, not the local network.”
“The growth in residential real estate is a side-effect of the pandemic: remote working.”
Real estate entrepreneur, Baja California Sur
The region was previously popular with retirees looking for warm weather and natural beauty but the current wave of investors is a younger, working-age demographic.
The entrepreneur continued, “Why be locked up in an apartment in a city somewhere? These people closing deals between multinationals and they can look up and watch the whales go by. There has been a similar effect for rentals, which in the premium sector grew by around 47%.”
Baja California Sur was suffering from the slowdown in tourism, the main source of income for the state so this is welcome respite. The most attractive areas have been Los Cabos and La Paz, which have all the services of a modern city, but other municipalities are clamouring for the arrival of new capital, e.g. Comondú. There is a noticeable openness to developments.
A local politician has some concerns that unplanned construction could be more of a hindrance than a help, “I have concerns about how services will grow to meet an increase in demand. The availability of water and electricity is something that the tourism industry has always struggled with, it is like the bogeyman of the region. These infrastructure challenges have not been solved yet and the increase in developments generates additional pressure. Unplanned and messy growth is going to create a lot of problems.”
“I have concerns about how services will grow to meet an increase in demand. The availability of water and electricity is something that the tourism industry has always struggled with.”
Politician, Baja California Sur
The environmental impact of new developments also worries the politician, “If the sector is to have sustained growth, then new developments must incorporate architecture that is harmonious with the environment and use local designers as far as possible. Otherwise, the developers will face strong opposition, for example proposed projects in Magdalena have faced strong opposition from the local population over the alienation of land.”
The other unanswered question is what will happen if everyone returns to the office?