Pros and cons of investing in real estate and property developments in the southeast

Real estate and property-development investments in Mérida stand out thanks to a low risk rate, modern infrastructure and a 7–10% return on investment.

Is real estate a good business, or is it better to invest in Mexican stock-market shares? What is the investment landscape in Mérida and the southeast, and which are the leading development projects?

The decision to invest capital in the right place

You often hear that real estate is a good business — but is investing in the Mexican stock market also good? Both have pros and cons.

Real estate is a tangible asset and, for many investors, feels more real than stock-market investments. On the other hand, investing in shares is profitable — but shares can be very volatile, especially when the economy or the company isn’t stable.

The important thing is for investors to diversify their portfolios to mitigate risk and maximise rewards. A mix of investments including real estate and shares is an excellent way to invest. So the real estate vs. stock market debate isn’t really a debate but a niche of opportunities. Investors must weigh the pros and cons of real estate vs. shares to choose the strategy that helps them reach their goals.

There’s no doubt real estate is a good business. Forbes recently advised its readers to invest in property developments, saying Mexico is one of the four best places in the world to buy a second or holiday home abroad.

Trends: sustainable development, mixed use and tourism

This year, big developments are betting on sustainability. New projects follow the path of sustainable development in Mexico, including various green technologies: water-collection systems, eco-friendly materials, solar panels and heaters, green roofs, home automation, and even alternatives that achieve green certifications like LEED (Leadership in Energy & Environmental Design).

Another trend in Yucatán is mixed-use projects — residential, commercial or workspace developments with amenities to improve daily life.

Today, the capital of Yucatán has more than 100 property-development projects. More than 25,000 units are for sale, awaiting investment for housing or business.

Tourism-sector developments are also on the rise, and Yucatán will host many of them. There are 20 planned projects, most in Mérida’s historic centre.

Annual returns on tourism-sector properties

According to the UN World Tourism Organisation, Mexico is the world’s eighth most popular holiday destination. 12-month occupancy rates average 85%.

Investment properties provide an average annual return of 8–14% for holiday rentals — effectively beating the stock market, without the volatility.

Read: Recommendations for buying in a coastal area.

The whole region also has consistently high capital gains of 8–10% a year, with continued area growth projected for the coming decades, meaning Riviera Maya real estate never depreciates. In some Riviera Maya areas, holiday-rental investments offer a 7–10% return, beating the stock market and hedging against inflation. Many Cancún agencies have expanded their offer to other popular destinations such as Playa del Carmen, Puerto Aventuras and Tulum.

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An attractive, competitive market for investment

The advantages of living in Yucatán attract many investors, and in recent years there has been great urban expansion towards the city’s outskirts.

The Yucatecan real estate market is worth more than 2.5 billion pesos a year. It includes housing developments, offices and shopping plazas. There are about 5,000 residential developments, and demand has grown 22%. Residential developments are the most interesting for investors.

Investing in real estate: cheap land and flexible regulation

The low cost of land for sale in Mérida is also a big advantage. Large plots in high-value areas have motivated developers to invest in the White City. Legislation and the approval process for developments are also much more flexible than in other states, with one-stop windows for permits and licences.

Environmental Impact Statement

Environmental measures for builders in Mérida include review, evaluation and public-consultation processes by citizens.

The aim (following models like Mexico City’s) is for Yucatecans to participate actively in the Environmental Impact Statement (MIA) that projects in their neighbourhoods propose. This seeks to propose and implement mitigation and prevention measures to reduce environmental impact.

Property developments in Mérida

Property developments in Mérida keep rising, with a wide, varied offer. Although 2019 was a complex year for developments in Mexico, 2020 looks better. The sector keeps growing and remains attractive — Mérida is one of the favourite destinations for these investments.

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The best areas to invest in Mérida

The north

The north is the highest-value area of the capital and has been growing thanks to recent developments. The best area to live in Mérida is the north. As one of the safest parts of the city, no surprise there are so many gated communities. La Isla, The Harbour, Altabrisa and City Center are the shopping centres in the area.

As the city grows, exclusive services and entertainment options have changed. A few years ago, Club Campestre or Gran Plaza were the most popular spots in the north; today, Galerías and The Harbour are the busiest. This growth has been gradual — as development happens, surrounding areas also show rising capital gains, so many investors see northern Mérida as a chance to invest in their future.

Prolongación Montejo

As the city grew, this avenue extended north — known as Prolongación Montejo. It’s the access route to large stores, bars and restaurants, so it’s one of the highest-capital-gain areas in Mérida.

Temozón Norte

From Temozón Norte to Cholul-Conkal, north of Mérida, this area stands out for its potential, with residential and residential-plus projects. In the budget segment, Temozón Norte and Santa Gertrudis Copó are favourites for being near entertainment and shopping. Neighbourhoods such as Tixcuytún, with medium/long-term capital gains, have drawn major developments.

Central Mérida

Three neighbourhoods are perfect to move to: Campestre, Colonia México and Miguel Alemán. They’re just north of the centre, about 10 minutes by car, and are affordable — usually a bit cheaper than Mérida’s old town.

The old town

Mérida’s historic centre and nearby neighbourhoods such as Santa Ana and Santiago are also a good place to live. Their traditional, sometimes bohemian atmosphere is an excellent match if you want to move to an area with modern services and a large housing offer.

The leading property developments in Yucatán

Vía Montejo

In 2019, the first phase of these luxury towers — seven in total — was inaugurated in northern Mérida. Vía Montejo is one of the best developments in Yucatán, with parks and green areas of up to 80,000 square metres.

Country Towers

In one of Mérida’s best areas, in the north, in Altabrisa, favourites for being near hospitals, shopping centres and access routes to the Yucatán coast. Country Towers is a luxury project of two 30-storey, 110-metre towers and an exclusive tower with fabulous amenities.

Rosavento Ciudad Maya

North of Mérida, a mid-range residential development offering 5,000 plots across 162 hectares. Plots range from 140 to 500 square metres, 4 kilometres from the Wellbeing Technology Hub, between Mérida and Progreso.

Aura Coast, Telchac Puerto

Following environmental measures for builders in Mérida and with sustainable development as its focus, the Aura Coast project, in Telchac Puerto, is a set of apartments incorporating sustainable technology. Total investment: 2,752 million pesos. Other Grupo Aura developments in Yucatán are Aura Smart Luxury Living, Torre Aura and Marena.

The advantages of investing near the sea

Many who move to Mérida choose to live by the beach. The main town is Progreso, with more restaurants, services and comforts than other coastal towns. Other options are Chelem and Chuburná, smaller and more intimate towns west of Progreso, chosen by foreigners.

East of Progreso is Chicxulub, another option, popular with Mexicans.

Playa del Carmen, vibrant and cosmopolitan

The cost of living in Playa del Carmen, and across the Riviera Maya, is extremely affordable, offering buyers a fabulous lifestyle at a fraction of the cost elsewhere in the Caribbean. Buying real estate in Playa del Carmen also lets you enjoy the many unique charms of this bustling international city.

Real estate is a good business in southeastern Mexico. There are hundreds of shops, restaurants and entertainment venues along Fifth Avenue, a large foreign community, and a constantly growing real estate market.

Tulum, the jewel of the Caribbean

Tulum hosts a large amount of real estate investment, with a wide variety of properties — turnkey condos for sale and holiday homes designed to provide continuous rental income but that could just as easily serve as a retirement retreat. Despite its rustic, wild feel, the town also has many shops, restaurants and venues. Clearly, real estate is a good business — and in Tulum, a guarantee.

Holiday homes and condos in the Riviera Maya

The Riviera Maya is a magical region stretching along the Mexican Caribbean coast, south of Cancún International Airport — so it offers easy access and modern infrastructure for millions of annual visitors. It hosts famous destinations like Playa del Carmen, Cozumel, Puerto Aventuras and Tulum, with an exciting mix of activities, shopping, dining and unforgettable adventures.

Investing in real estate is a good business, and in the Riviera Maya the return is guaranteed — it’s the fastest-growing real estate market in all of Latin America, offering better value than any other beach destination equipped with modern infrastructure, luxury services and first-class amenities.

Why invest in real estate in Mérida?

Why does so much investment reach Yucatán? The context is unique. The advantages of living in this part of the country are many: the cost is affordable and the quality of life is one of the best in Mexico.

Developments are modern and property values are low compared with other capitals like Monterrey or Guadalajara. A house costs an average of 2.09 million pesos, while an apartment can be bought for 1.72 million. To rent, the average price for a house in Mérida is around 9,584 pesos a month and an apartment 6,000, for the upper middle class.

Another advantage is the privileged location. Despite being a city, it’s 20 minutes from the beach, and thanks to its road infrastructure it’s ever easier to reach ports like Progreso.

More reasons investors bet on Yucatán:

1. A modern capital

The state capital is the most developed centre for business, financial, technological, medical and educational services in the southeast.

2. Job stability and skilled labour

Education in Yucatán is of great quality, with programmes at various levels and prestigious universities. Its labour force is skilled and prepared.

3. Import/export and access to large markets

Progreso and its deep-water port are strategic for export and import, and a key point for cruise arrivals.

If you still don’t know what to invest in, there’s no doubt property developments and real estate in Mérida and Yucatán offer great returns. Whether residential, tourism or commercial, the possibilities and benefits are many. What are you waiting for to invest and build your future at the lowest risk?