MEXICO CITY, Aug 8 (Reuters) – Mexico tried to reassure investors that a global markets rout would not spark an economic crisis even as recession fears in the United States, its key trading partner, pounded Mexico’s currency and stocks.

Mexico’s peso sank to a seven-month low on Monday and stocks tumbled almost 6 percent in the first day of trading after Standard & Poor’s stripped the United States of its top-tier credit rating.

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The Treasury and Public Finance Secretariat (SHCP) of Mexico have announced excellent news concerning the job market in the country. According to Ernesto Cordero Arroyo, the head of SHCP, there are about 425,819 jobs created between the months of January and July of this year. This is a huge evidence of economic renewal and strength of Mexico despite global crisis.

Cordero Arroyo announced the news at a press conference along with Javier Lozano Alarcon, the Secretary of Labor and Daniel Karam Toumeh, head of the Mexico Social Security Institute. The head of SHCP noted that the Mexico has indeed established an economic its stability since the country has surpassed the uncertainty in economic as many other nations are facing.

As of July 2011, there are about 43,329 new employees registered in the IMSS. This represents an increase of 0.3 percent over the past years. Lozano Alarcon, noted that there are more than 15 million people currently registered at the IMSS.

Lozano Alarcon also noted that the 425,819 new jobs in the entire year will mark the increase from last 2010 by 2.9 percent. The Secretary of Labor added that there are 65 percent of the employees registered at the IMSS that are permanent employees. The rest are under temporary employment.

Lozano Alarcon also anticipated a creation of 600,000 new jobs by the end of 2011. Yet, this vast increase will still not be enough to meet the demands in labor in the country.

-Doug Jones
President & Founder
Mortgages In Mexico
http://MortgagesInMexico.com
Doug@MortgagesInMexico.com

The investment projected for the agricultural and fishing sector of Mexico will benefit almost 5 million producers. Some of the main goals for the huge resources are to generate and implement advance technologies in the agricultural and forestry sectors, to improve the efficiency and quality of customer service, to increase food safety, to ensure transparency in the services, to provide support to the producers and to stimulate scientific marine research.

According to Nancy Jesurun-Clements, specialist in Natural Resources of the IDB, the said changes will implement an increase in the sanitation quality standards of Mexico as well as advancing its agenda of research and innovation. Around $70 million will be used to control and eliminate plagues and diseases that are affecting the agricultural sector. This project will comprise the construction of a new facility to fight the so called Moscamed, or the Meditteranean fruit fly, further protecting fruit and vegetable producers and exporters from the plague.

According to the report announced by IDB, Mexico has not been affected by this kind of plague since 1982 and therefore new trade multiplication of regional traffic has enhanced the liability faced by the agricultural sector.

-Doug Jones
President & Founder
Mortgages In Mexico
http://MortgagesInMexico.com
Doug@MortgagesInMexico.com

Mexico’s Coca-Cola Femsa (KOFL.MX) (KOF.N), the largest Coke bottler in Latin America, reported a 6 percent rise in second-quarter profit as higher sales offset rising costs of raw materials.

“Our performance was supported by volume growth across all of our divisions and our ability to implement pricing initiatives over the past several months throughout our main markets,” Chief Executive Officer Carlos Salazar said in a statement.

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Rodolfo Lopez Negrete, director of the Tourism Promotion Council of Mexico’s Tourism Ministry said in an interview with Xinhua that the new direct route between Mexico City and Beijing will be made as one of the top priorities of the ministry and they are currently deliberating issues concerning with different international airlines.

Lopez said that the current plan is now in discussion with Hainan Airlines of China, Cathay Pacific of Hong Kong and Aeromexico of Mexico. China is one of the main priorities of the country and that there is a special investment budget for tourism promotion in China. He also added that the opening of the new direct air route between China and Mexico City will open up a lot of opportunities especially in the increase of the number of tourism arrivals in the country.

The talk of the country’s officials with Hainan Airlines is in progress even if nothing is still confirmed. Aeromexico is also in discussion with the tourism authorities in the possibility of opening new flights directly to Beijing. At present, the airline has a direct flight to Shanghai with a stop at Tijuana.

In addition, the authorities are also considering the idea of opening a flight between Mexico and Hong Kong.

Lopez also added that it is the goal of the tourism in the country to receive at least 100,000 Chinese tourists in the next years. Currently, Mexico has nearly doubled in the past two years in the number of Chinese tourists, from 16,000 in 2009 to 30,000 in 2011.

To facilitate the faster processing of the new direct flight, the ministry and the Promotion Council is working with the Mexican embassies and consulates in China in speeding up the overall processing of tourists and business visas for Chinese nationals.

-Doug Jones
President & Founder
Mortgages In Mexico
http://MortgagesInMexico.com
Doug@MortgagesInMexico.com

Zozaya, who is also president of Kansas City Southern’s Mexico operations,  discussed the popularity of the country among foreign investors, “We’re seeing a lot of interest from big companies, including those in the Far East, for locating factories in Mexico.”

On average, Mexico has received 40 percent of its FDI from the U.S and since 2009 the U.S. has aided Mexico in efforts to increase its foreign investment. At $15.3 billion, the ’09 numbers were the lowest in a decade and were directly connected to the recession in the U.S.

In 2011 Mexico’s FDI is expected to continue accelerating, with a $135 million investment currently on the horizon from Kansas City Southern (KSU), and an $80 million project to build a new railroad terminal in Lazaro Cardenas is also in the works and expected to continue over the next several years.

According to an additional report by HSBC Mexico, another important factor in the country’s FDI recovery will be continued improvements to the terms of trade with Mexico. The improved conditions are expected to occur due to a combination of two main factors, mainly the ongoing gradual appreciation of the Chinese renminbi and higher labor costs in China. Growing investor confidence in Mexico’s macroeconomic stability is also expected to play a major role in FDI recovery, which HSBC predicts will reach up to $25 billion this year, and as much as $28 billion in 2012.

-Doug Jones
President & Founder
Mortgages In Mexico
http://MortgagesInMexico.com
Doug@MortgagesInMexico.com

The poll could reduce any pressure for Mexican central bankers to raise interest rates soon. Indeed, the poll showed that analysts expect a less aggressive rate-tightening cycle, which most expected would begin in the first quarter of 2012.

Mexico has lagged regional peers like Brazil in terms of economic growth after suffering one of the world’s sharpest economic contractions in 2009. This has kept inflation low.

The poll, which was carried out by the central bank in late April, showed consumer prices were seen rising 3.87 percent this year, down from a forecast of 3.92 percent in the previous month.

The average forecast for the central bank target interest rate during the first quarter of 2013 fell to 5.99 percent from 6.24 percent a month earlier.

The forecasts showed the “underlining market belief that inflation will be controlled,” 4cast consultancy said in a note.

The Mexican central bank has kept its target interest rate steady at 4.5 percent since July 2009.

In the central bank poll, analysts expected the economy would expand 4.37 percent this year, compared with a forecast of 4.25 percent in the previous monthly poll.

Mexico bounced back from recession last year, growing at its fastest pace in a decade, and the central bank has said it could grow as much as 4.8 percent in 2011. Strong industrial output in the United States is expected to power Mexican growth this year. Many Mexican factories operate in lockstep with plants in the United States.

All members of the central bank policy board recently acknowledged the economy was growing quickly, though they said they were divided about how much this will fuel inflation.

Eighty-five percent of analysts surveyed expect the central bank will raise its target rate for overnight interbank lending by 25 basis points to 4.75 percent during the first three months of next year. Just under half expect the move in the fourth quarter of 2011.

Mexico is the biggest Latin American country not to tighten rates in the last year.

Brazil and Chile have felt more inflation pressure because their economies bounced back faster from the global recession.

On Monday, a central bank poll showed economists raised their forecast for Brazil’s annual inflation rate in 2011 for the eighth time in a row. [ID:nN02204601] ,

Chile’s central bank is expected to raise interest rates an additional 50 basis points to 5.0 percent in May, a central bank poll in that country showed last week.

In Mexican financial markets, investors shrugged off the news from the Mexican central bank poll.

In a separate report, the central bank said money sent home by Mexicans living abroad rose 4.8 percent in March from a year earlier. In February remittances rose by 6.0 percent.

-Doug Jones
President & Founder
Mortgages In Mexico
http://MortgagesInMexico.com
Doug@MortgagesInMexico.com

Gross domestic product, a measure of all the goods and services produced, expanded 4.6% in the fourth quarter from a year earlier, the National Statistics Institute, or Inegi, said Monday. For the full year, output grew 5.5% from 2009, when GDP had contracted by 6.1% amid the global recession.

The fourth-quarter data were better than the 4.3% median estimate in a Dow Jones Newswires survey of nine economists. In seasonally adjusted terms, GDP grew 1.26% in the October to December period from the previous three months.

A better-than-expected U.S. economic performance toward the end of last year was largely responsible for Mexico’s strong finish, as consumers north of the Rio Grande continued demanding the manufactured goods that form the backbone of Mexico’s industrial sector.

Industrial production during the final three months of 2010 grew 4.7% from a year earlier and 1.29% in quarter-over-quarter, seasonally adjusted terms.

As worries that a hiccup in the U.S. recovery during the second half of the year failed to materialize, dynamism in Mexican industry continued to feed domestic demand for services in the fourth quarter.

The service sector, some components of which have lagged the overall economic recovery, expanded 4.2% in the fourth quarter and 1.22% from the previous three months. Agricultural production increased 9.9% in the fourth quarter from a year earlier.

“The combination of economic growth and low inflation will allow Mexican families to feel the economic recovery in their pockets,” Finance Minister Ernesto Cordero said at a press conference. “The main indicators we have at the close of 2010 show a clear trend of economic consolidation as well as growth that is more sustained and balanced between internal and external sectors.”

Mexico’s GDP last year posted the fastest growth since 2000, when it expanded 6%. But economists say output remains below capacity, reflecting the severity of the 2009 economic crisis that hit Mexico harder than any other Latin American country.

The Bank of Mexico expects the output gap to close in the second half of this year.

BBVA Bancomer, the country’s largest bank, said Mexico should benefit this year from a higher growth outlook for the U.S. and favorable financing conditions. “It is reasonable to expect that in 2011-2012 Mexico will maintain average annual GDP growth of 4%, which in any event is above the average of the past decade, which was close to 2%.”

But the bank highlighted well-known obstacles for Mexico’s future economic growth: weak rule of law, a lack of competition among local companies, and “very reliable but vulnerable and insufficient fiscal policy.”

Article from Dow Jones Newswires by Paul Kiernan

-Doug Jones
President & Founder
Mortgages In Mexico
http://MortgagesInMexico.com
Doug@MortgagesInMexico.com

http://travelmerida.wordpress.com/2010/12/17/why-buy-mexico-real-estate/#wpl-likebox

Kyle

By Travel Merida

Manufacturing in the Mayan world differs largely from western cultures in that consumer goods are independently produced on a vast scale in the Mayan world where as in western cultures the manufacturing is consolidated [in factories].

Family run enterprises and even individual entrepreneurial initiatives are quite popular means for earning a living especially in geographic areas that have absolutely no industrialization what so ever. Other than farming there are no other means of making a living other than producing some form of marketable product.

To this end tourism plays a large part in the economy of the Mayan world because many products are created simply for this market. These goods also find there way into stores all over the world and exporting plays a large roll.

Visit our Travel Merida website at TravelMerida.com and to shop for Yucatan Mexico Arts & Crafts visit SHOP TRAVEL MERIDA

We Thank You most kindly for your purchase for not only are you supporting the TravelMerida.com website, but the Yucatan people.

Now is a great time to invest in Mexico

By Travel Merida

Mexico has become a popular location to own a second home or vacation property. Many people from around the world — and especially the United States and Canada — are actively buying real estate in Mexico. In recent years Mexico become an attractive place to invest. Most of us know at least one person who has recently visited Mexico or who has made a real estate investment in the country. We believe there are several reasons behind this trend:

1) The prices of Mexico properties are often favorable in comparison with other destinations. And, with more and more people discovering Mexico, many experts believe the long-term investment prospects remain attractive.

2) Mexico’s culture and services are increasingly welcoming of foreigners. While Spanish remains the primary language in Mexico it is also true that more and more people speak English, enabling Americans and Canadians to have a more comfortable experience. These days it is not uncommon to encounter a Home Depot, Starbucks, McDonald’s and other ’American’ brands while in Mexico. Cell phone service, Internet and Wi-Fi are also increasingly common in the more popular locations. All in all, Mexico feels more like accessible and comfortable than in the past.

3) Over 70 million people in the United States are now over 50 years old. This segment of the population is prone to seek vacation homes, retirement locations and real estate investments. There is also more wealth worldwide than ever before and much of this wealth prefers to invest in real estate. As more and more people invest in Mexico additional services are built to support this trend. As this occurs, it often makes Mexico even more appealing to new investors.

4) The long-term future of Mexico looks promising. The country itself is becoming stronger economically and the opportunity for long-term real estate appreciation in most regions continues to be favorable.

5) Mexico’s warmer climate is attractive to many from the United States, Canada and other foreign locations. For decades many people have enjoyed vacationing in Mexico. “Purchasing” property is the natural next step.

6) Over 1 million Americans now live full time in Mexico. Along with residents who have moved from other countries this large population has proved the safety and viability of life in Mexico.

7) Most of the popular destinations in Mexico offer an array of interesting and fun things to do. From beach life and fishing to golf and tennis most people are excited at the numerous ways one can recreate in Mexico. Those who enjoy exploring the rich history and culture of Mexico find endless opportunities to explore each region has its own unique opportunities. And, of course, many people find that Mexico is the perfect destination for simple rest and relaxation.

8) There is growing inventory of condos, villas, homes and land plus a wide selection of resorts and developments with extensive amenities. This provides a steady supply of inventory for interested buyers and investors.

As you can see it is no surprise that Mexico provides an increasingly attractive location for Americans, Canadians and other foreigners. Most experts believe that Mexico real estate provides an attractive opportunity for both investment and enjoyment for decades to come.

The North American Free Trade Agreement (NAFTA), in effect since January 1994, plays a very strong role in the bilateral economic relationship between Mexico and the United States. The two countries are also closely tied in areas not directly related to trade and investment such as security, environmental, migration, and health issues. The effects of NAFTA on Mexico and the state of the Mexican economy have important impacts on U.S. economic and political interests. As NAFTA approaches its 15th anniversary, a number of policymakers have raised the issue of revisiting NAFTA and renegotiating parts of the agreement. Some important factors in evaluating NAFTA include the effects of the agreement on Mexico and how these relate to U.S.-Mexico economic relations. In the 110th Congress, major issues of concern have been related mostly to economic conditions in Mexico, the effect of NAFTA on the United States and Mexico, and Mexican migrant workers in the United States.

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With Mexico already losing a share of their exports to low cost China, they can ill afford the additional costs of tarrifs. Economic growth would be slowed by loss of manufacturing jobs, and this would negatively impact the overall financial health of Mexico which would have a domino effect on the housing sector. A slower export market usually means less tax revenue that can be invested in infrastructure and government housing programs. Calderon’s push to increase the number of home loans granted to citizens would be hindered by a decreased budget for financial assistance programs. A less healthy economy can make it difficult for people to get mortgages or keep them as they could be fighting unemployment and higher interest rates. Less demand for homes could lower home values overall, though it may have a lesser effect on communities with a lot of American expatriot retirees.

Proponents for renegotiation say that NAFTA hurts Mexico because it allows factories to pollute more than if they were in the US and Mexicans can not compete with US farm subsidies. On a micro scale there are definitely some losers, but the big picture is that renegotiation would significantly hinder Mexico’s progress as an emerging world economy and I don’t think this helps anyone.

One of the potential outcomes of the rise of the rest, is the growth in the number of people who are able to afford second homes and retirement homes in places like Mexico. This could mean increased demand for the Mexico real estate ocean front market in the future. China, whose growth has been about 10% for the past decade is projected to soon surpass the US in GDP to become the number one economy in the world. As the cumulative wealth grows in these emerging countries, many new millionaires will result from the rise in wealth and some will be interested in retiring to a nice beach front property in a sunny climate. Mexico is also considered an emerging market, and as more Mexican citizens rise to an income bracket to be able to move to a more desirable location in Mexico it should also increase competition for the limited supply of homes. The rise of emerging markets should also increase worldwide travel and thus demand for the rental market as was discussed in the previous post, What the Tourism Time Bomb Means to Mexico Real Estate. Here is a very interesting video on global trends.

Mexico’s has a far more robust economy than in the past that experienced major financial crashes (inflation was 35% and lending rates exceeded 59% in 1995). Economic reforms encouraged trade and foreign investment which reduced external debt and reduced trade deficits. While a slowdown in exports is expected in 2008, one of Mexico’s greatest assets is its oil. Mexico’s nationalized oil industry was the sixth largest in the world in 2006, producing 3.71 million barrels a day. This provides steady revenue to the government, and has increased due to $130 per barrel prices. Mexico’s lending practices are far more conservative than in the US which reduces risk of mass foreclosures. There is no such thing as an adjustable rate mortgage in Mexico and most loans require a substantial down payment and extensive credit checks. The mortgage backed security market exists but is very small compared to the US (US$5.8 billion by 2008 EIU).

The predicted global economic slowdown in 2008, will have a minor effect on Mexico’s real estate market because there are just too many factors that favor growth. The market has many undervalued areas, demand is growing, infrastructure is improving, foreign direct investments are increasing, the country is getting richer, etc., etc. The US economic slowdown is temporary, and so is the opportunity in the Mexico real estate market. Thoughts?

Sources

http://www.eia.doe.gov/emeu/cabs/Mexico/Oil.html

http://www.latinbusinesschronicle.com/app/article.aspx?id=2503

Medium and long-term financing: Structured finance. EIU: Country Finance: Mexico, 2008.

The mortgage market in Mexico is extremely young but quickly maturing. The government has made it one of its top priorities to give more people access to home mortgages and facilitates hundreds of thousands of home loans now made each year. Mexico’s mortgage backed security market was born in 2003 and has attracted billions of investment dollars into the mortgage market.

2. Mexico is an Emerging Economy

The GDP of Mexico has been steadily rising at a steady rate over the past decade. This has helped pull citizens out of poverty and into a growing middle class. The workforce has become more educated, with the average citizen adding about a year of additional education since a decade ago. Higher gas prices also mean additional revenue for Mexico’s government since the country has a great abundance of oil reserves.

3. Increasing Demand

Baby boomers, a growing middle class in Mexico, greater availability of mortgages in Mexico, and American’s being priced out of US markets all lead to greater demand for the supply of good Mexican property.

4. Potential for Growth

There is tremendous untapped potential in Mexico. Prices are very low compared to inflated US home prices. Even the heavily developed markets have areas with opportunity for strong appreciation.

5. Ideal Climate

Living in a tropical climate and being surrounded by beautiful landscapes are features of Mexico that can definitely boost your sense of well being. Besides the potential for out performing other investments in your portfolio, living where there is ideal weather and being able to play by the beach are pretty great too.

Also see Top Ten Reasons Why Mexico’s Real Estate Market Will Grow

With tourism accounting for 4.9 percent of Mexico’s trillion dollar economy, $20 million doesn’t seem like much of an investment. That accounts for about $1 per tourist. You can’t make much of an impact with a budget of $20 million.

The increase in airports will be a good thing for the real estate market. If flying into a location is more accessible, the local home values will increase as a result.

Source: Mexico set to invest for visitors

The only question left for real estate investors now is determining which part of Tamaulipas most interests them and the State of Tamaulipas actually has an organization to help them with determining the answer to that very question. Tamaulipas has created an organization known as SARET (Fast Track to Opening a Business in Tamaulipas).

The Office of the Secretary of Employment and Economic Development has created one simple form to register a business, meet governmental requirements, register patents, and obtain barcodes for products. In addition, they provide a professional staff to supply statistics, procedural information, and to arrange visits to locations that fit the needs of the business (Buchanan).

The following is a list of towns and cities in Estado de Tamaulipas and the economic activity that is either underway or soon to be underway. After reading the descriptions of these towns and villages, the wise investor can explore all of Tamaulipas and get a feel for the terrain at Pueblos America.com or pack up the car, cross the border and tour the state for themselves. Gasoline is still under $3.00 USD per gallon and the fartherest point in the state (Tampico) is only about six hours away.

Locations to Consider:

Altimira (on the Gulf coast just north of Tampico): petro-chemical and plastics industries; BASF; Dupont of the U.S.; Mexichem (PVC); Japan’s Bridgestone Corp. (carbon black); $500 million dollar Shell, Total of France, and Mitsui of Japan plant supplying natural gas to Iberdrola of Spain and Electricite de France who, in turn, supply electricity to the Federal Electricity Commission; Posco of South Korea’s $200 million dollar steel plant, J Ray McDernott’s $220 million dollar site to construct deep-water oil rigs

Matamoros (across from Brownsville, TX): manufacture of fine furniture for South Africa’s Kwalu, manufacture of auto parts for Germany’s CRH

Reynosa (across from McAllen, TX): This city is doing so well that they have just had an ExpoVivienda (House Fair) to give people a better understanding of what is available, and how near housing developments are to schools and work. Nearly 30 different developers participated in the fair.

Nuevo Laredo (across from Laredo, TX): manufactures notebooks for China’s Apego

Ciudad Victoria (State Capital): $80 million dollar medical center underway, growing IT industry, a new call center with 500 employees

Nuevo Villa de Padilla (on Hwy 101, northwest of Lake Guererro): meat processing plant owned by Koreans and exporting to Seoul

Tula (on Hwy 101 south of Victoria): 6,000 acres of olive groves, largest olive groves in Latin America.

El Mezquital (50 miles from Matamoros): plans for port capable of handling 5 to 10 thousand metric ton ocean-going cargoes. More about El Mezquital (in Spanish).

La Pesca (at Soto La Marina): at the southern tip of a 1.4 million acre bioreserve that extends all the way into Texas. 17 miles of unspoiled beach front set aside for development, and at the mouth of the Soto La Marina River, which is not polluted in any way. Soto La Marina is an area that is only about 3 hours from the border and is one of the best “yet to be discovered” retirement areas in the world.

Lake Guererro (Hwy 101 before Victoria): a Google search for “Lake Guererro” will bring the potential investor to views of some of the best bass fishing and winged hunting in the world.

El Chorrito, Guadalupe Victoria, and the lake created by Presa (Dam) Pedro J. Mendez (Hwy 85 to the northwest of Victoria): Sure to become a tourist favorite, hill country bordering on mountains, a pilgrimage for the Virgin of Guadalupe, and a lake that is the stuff of dreams. Read about this area on pages 3-1, 3-2, 4-1, and 4-2 of Mexico With Heart.

To learn more about the Agriculture, Livestock, Forestry, and Fishing industries in Tamaulipas, visit the State’s Rural Development site.

To learn more about Tourism in Tamaulipas, click here and to explore other functions of the Government of the State of Tamaulipas, click here.

By now, the average investor will be wondering what is happening to make this tiny ribbon of a Mexican state so attractive to industry, tourism, and retirement. The answer begins with Tamaulipas’ very long border with the State of Texas, as well as a significantly long and diverse coastal region. Four distinct seasons and a few waterfalls, spectacular lakes, and world class fishing and hunting are not negatives either. But is there something more at the root of this interest in Tamaulipas? Of course there is. It has 15 border crossings into the U.S. and soon will have a highway directly connecting it with the west coast of Mexico and the new multi-billion dollar port there. This will give Asian products a straight route across Mexico to the south Texas border of the U.S, burning inexpensive Mexican gasoline all the way. In addition, NAFTA rules are especially beneficial for foreign corporations who are located on the Mexican side of the border because these rules make it possible for foreign corporations to compete with their American counterparts inside the United States. None of this logic is lost on corporations around the world. As the price of oil goes up and shipping becomes more and more expensive, it is expected that many more foreign manufacturing companies will continue to come to Tamaulipas and, with them, a real estate investment boom that defies imagination.

1. President Felipe Calderon has set a national goal of a million new mortgages a year by 2010

Government regulation should boost the housing market by aiding people to get homes of their own.

2. Overall debt remains low for Mexico’s lenders

Lending institutions are more willing to lend to home buyers and have increased lending significantly. However they are not relying on debt and thus are unlikely to be threatened by bankruptcy like a certain major lender in America.

3. Major mortgage insurers now back Mexican loans

Mortgage insurers include U.S.-based AIG United Guaranty and Genworth Financial are investing in Mexico’s mortgage market. Along with reduced risk, lenders can bundle and sell debt as mortgage-backed securities and raise capital to sell more loans. From 2003 to 2008, almost $6 billion of these securities have been sold.

4. Mexico’s mortgage market is more stable

Few people in Mexico flip their homes and the sub-prime market is non-existent. Lenders have enough demand for loans, that they can be selective and only grant loans to people with good credit.

5. Private lenders called Sofoles are pioneering home loans to lower working class

Sofoles which is stands for a Spanish acronym for “limited financial institution” open small offices and cater to individuals who are unlikely to get a bank loan. They are able to grant loans to the working class because they reduce their risk by requiring relatives to co-sign and sending debt collectors to their doorstep.

6. Increased competition in banks have driven down mortgage rates

In November 2007, average 15-year mortgage rates were 12.5%, a great decrease from the 65% rates of 1995.

7. Currently 6 percent of Mexico’s 25.7 million homes are financed with mortgages

Most Mexico residents inherit, pay with cash, or build their homes. With favorable conditions, this figure can only go up.

8. Increased migration from US

Demand will be boosted by the baby boomer segment and other Americans fleeing the worsening economic conditions in the US.

9. Many areas are still underdeveloped

Areas like Loreto and Merida are some of the locations that have all the qualities to become the next blockbuster destination of Mexico in the not too distant future. What they lack are a developed infrastructure that will encourage growth.

10. Tourist travel predicted to double

Some experts, such as the authors of “The Tourism Time Bomb” article in the Harvard Business Review are predicting a global tourism to double to 1.6 billion which will result in increased demand for travel lodging. New destinations will likely be created and will be opportunities for tremendous growth.

Source: International Herald Tribune