In the last five years, housing rental costs in Mexico have surged dramatically, with an average increase of 10 percent nationwide. However, in major cities, this rise has been even more pronounced, reaching increases of up to 70 percent, according to data from Inmuebles24.
Located in Mexico City, the rental market has seen significant changes, particularly in urban hotspots. Roberto Reveles, the manager of Key Accounts at Inmuebles24, noted that while the national average is around 10 percent, certain municipalities in Nuevo León have experienced rental hikes nearing 70 percent. "A national increase in rental prices ranges between 5 and 10 percent, but in major cities, we find much higher figures," he explained.
In terms of specific figures, the report reveals that rental prices in Monterrey have surpassed 24,000 pesos, while in Mexico City and the State of Mexico, they exceed 17,000 and 12,000 pesos, respectively. Guadalajara, another significant urban center, has seen its rental costs rise by 45 percent over the past five years, a trend mirrored in both Mexico City and the State of Mexico, which reported increases of 45 and 40 percent, respectively.
This sharp increase in rental prices can largely be attributed to gentrification and the influx of foreign companies and their employees. Reveles elaborated on this, stating, "One of the factors driving up housing prices is gentrification and the arrival of foreign people, investors, and companies that come to the country and bring their workforce, generating high demand in certain cities."
The phenomenon of gentrification particularly affects areas with already high property values, such as Polanco and Roma in Mexico City. Mauricio Domínguez, director of Data Market at Tasvalúo, emphasized that the interest in these neighborhoods is not limited to foreigners or company executives. "People from all walks of life are drawn to these areas due to their connectivity and cultural offerings," he stated.
Moreover, this trend isn't confined to major urban centers alone. Tourist hotspots like the Riviera Maya, Tulum, Playa del Carmen, and Los Cabos are also experiencing similar pressures, as the arrival of foreign visitors drives up rental costs. César Fernández del Campo Rabatte, director of Grupo Macondo Desarrollos, pointed out that some countries, including Spain, are implementing measures to curb gentrification and its associated rental price inflation. He noted, "In various localities in Spain, the operation of companies like Airbnb is prohibited in central city areas to prevent rapid rental price increases."
The impact of rental price inflation on the local population is significant. An alarming 51.4 percent of individuals in Mexico rent their homes due to a lack of access to credit or financial resources, according to the latest National Housing Survey (ENVI). This situation highlights the growing divide between property ownership and rental availability, especially as the cost of properties continues to rise, making renting a more accessible option for many.
As the demand for rental properties continues to escalate, experts predict that rental prices will keep increasing in the coming months. The trajectory of these prices will largely depend on market demand and the potential displacement of residents unable to afford rising housing costs. Reveles indicated, "The prices of rentals will continue to rise in the coming months, depending on the market demand and a possible displacement of the population from the cities if they can no longer afford housing costs."
This multifaceted issue involves various factors, including public policies, capital controls, interest rates, and decisions made by central banks, all of which play a role in shaping the housing market. The situation is not unique to Mexico but is a global phenomenon affecting many urban areas around the world.
As cities continue to evolve and attract new residents and businesses, the challenge remains on how to balance growth with affordability. The current rental market dynamics in Mexico underscore the urgent need for policies that address these challenges while ensuring that housing remains accessible for all residents.
