Market Trends of Latin America Condominiums and Apartments Industry
This section covers the major market trends shaping the Latin America Condominiums & Apartments Market according to our research experts:
Increasing Sales of Apartments Driving the Market
According to government and industry figures, Colombia's supply of urban housing has been increasing. However, it has not been sufficient to offset demand. According to official statistics, the country's housing stock is more than 1.3 million homes short. To meet demand, the government has implemented policies that encourage and subsidize construction and housing investment. Colombia is experiencing the region's fastest-growing construction boom. Some companies are helping solve the problem, with La Haus from Medelln obtaining more than USD 158 million from investors. La Haus stated that its latest round would enable it to help solve Latin America's extreme real estate inequality by bringing liquidity to real estate developers and customers.
Luis da Silva, Brazil's newly re-elected president, announced plans to revive the housing finance program established during his previous term as a key pillar of his new administration's goals. Brazil currently has a housing deficit of more than 5 million homes. Affluent buyers in both of Brazil's largest cities have preferred luxury apartments. In Sao Paulo, sales of apartments priced above BRL 2 million (approximately USD 390,000) increased by 3.2% in the year ending June 2021. The increase was even greater in Rio de Janeiro, where transactions increased by 10%.
Further, according to a study conducted by Colombian startup La Haus, Mexico may need to invest nearly 4% of its GDP each year for the next two decades to fulfill the demand for residential real estate. In Mexico, the demand for housing is increasing while the number of people living together is decreasing. Several homes in Mexico may also need to be replaced in the coming years because, according to Mexico's national statistics agency, 57% of homes were built by their owners, many of which do not meet building codes.
Increasing Demand for Luxury Condominiums
Polanco, known as the "Beverly Hills of Mexico," is the cultural center of Mexico City, the country's capital, and is home to some of Latin America's most expensive properties. According to Mexico Sotheby's International Realty, the general price range for luxury housing is USD 6,000-USD 12,000 per square meter. Single-family mansions from the 1950s and 1960s, which are extremely rare, sell for between USD 12 million and USD 15 million. Most of them have been transformed into restaurants, hotels, offices, and shopping malls.
Los Cabos is located on the southernmost tip of Mexico's Baja California peninsula, in Baja California Sur. It has become one of the most sought-after markets for exclusive second homes, particularly among high-net-worth individuals from the neighboring United States and other wealthy buyers from across the world. Demand increased sharply in 2021, implying that the time to market for property listings is becoming increasingly short while prices continue to rise. A luxury property in Los Cabos costs an average of USD 3.1 million. A luxury condominium will cost around USD 1.5 million, whereas a single-family home will cost around USD 4.3 million. The National Association of Realtors identified Argentines (13% of all buyers) as the top Latin American customers in southern Florida for 2021, followed by Colombians (12%), Venezuelans (10%), and Mexicans (7%).
