Mexico’s Economy Fairs Well Against US Slowdown

Mexico’s GDP growth is expected to end up between 2-3% for 2008 [1], a positive sign that Mexico’s economy can overcome the effects of a US slowdown and still be productive. Joydeep Mukherji, the team leader for the Latin American soverign ratings at Standard and Poor, praised economic progress in Mexico while urging further reform to deal with weaknesses in oil dependence and monopolies in a recent policy paper for the University of Miami.
Stable Financial Environment
One factor that is helping Mexico weather the storm to the north is their stable financial environment. Mukherji recognizes Mexico’s government for being fiscally responsible in their borrowing to slowly improve their infrastructure. In addition, credit availability is slowly growing and 80% of the banking sector is foreign owned. Inflation has been kept in check at 5% for 2008, despite rising global costs. As a result Mexico was given an investment grade sovereign credit rating and is one of the most financially stable environments in Latin and South America.
Economic Vulnerabilities
On the other hand, Mukherji points out vulnerabilities in the government’s reliance on oil revenues and the tolerance for monopolies. Oil revenues accounted for approximately one third of total government revenue in 2007, and production fell 5% in 2007. Mukherji suggests that falling oil prices may actually benefit Mexico’s economy since it could lead to increased demand for Mexico’s manufacturing goods which account for over 80% of their total exports. Mexico’s strength in manufacturing makes them less oil dependent than many of their Latin American and South American neighbors. Mukherji is also critical of the government’s tolerance of monopolies in industries such as energy and telecom which stifle investment and keep prices artificially high.
Mexico has appeared to turn the page from the days of rampant inflation and financial stability in the early 90’s. Mexico is a trillion dollar diversified economy with internationally owned banks and improved government oversight. As a result, investments in Mexico presents lower risk than less developed economies such as Nicaragua. Economic and financial strength is a great advantage of investing in real estate in Mexico.
Source:
1. More Mexico Reforms Necessary by Joydeep Mukherji

A Brief History of Real Estate in Merida, Yucatan

When people think of buying real estate in the Yucatan Peninsula, they often concentrate solely on resort areas like Cancun, Playa del Carmen and the Riviera Maya, while overlooking other parts of the region. Many of these alternatives might be perfect for you, and can offer some quality of life benefits you may not have considered. Merida, the capital of the state of Yucatan, is one such region.
What makes this area attractive as a property investment opportunity for you? Keith Heitke, a New York City transplant and owner of Hacienda Mexico Real Estate in Merida, gave us his take on the Yucatan. “This is a real city,” he said, “with a symphony, private and public schools, good infrastructure, and most of all, a wonderful sense of history, often lacking in the beach resorts of our beautiful peninsula.”
The area’s market of buyers consists mostly of Americans, Canadians and Europeans, but it is a developing market, and one that holds real promise. According to Heitke, “if people find us here, they usually are either totally set on coming here to live, or are convinced quickly once they look around. These people don’t rely normally on selling anything in their home state (to finance their purchases); they’ve allocated monies for this move. So I see it as a steady incline of buyers, that is, until it is really on the map, at which time it will be a big jump in interest in our area.”
Returns on investment are varied, and Heitke has seen returns for his clients varying anywhere from twenty to two hundred percent. “A good friend of mine bought a ruin in the right place for 30k, cleaned out the junk, watered the small yard, and sold it for 90k.” Not all sales net 200 percent, and few properties can be found for 30k, but you can still find gems in the area. And many of them have a three hundred year head start over their cousins to the east in Quintana Roo.
The area has no shortage of older homes, and many are historic properties. Many of them are located in the centro, or city center, of Merida. “I love Centro and its old houses,” said Heitke. “I live there and give the Merida English Library House and Garden Tour there each Wednesday from October through March, and there are some great houses in neighborhoods very near the center.”
Some of these older properties are more well-preserved than others. You’ll find beautiful vintage residences that have been brought back to their original splendor, others that have been adapted to modern life, and yet others that are just begging for some TLC. These properties have good bones and architectural treasures like beamed ceilings, moldings and mosaic floors. Some of them have been forgotten for years, and with some time, love and money, they can be the right real estate investment choice.
Merida has existed since the Spanish came to the area in the 16th Century. Walking down the streets of central Merida, in the city square by the Cathedral, you can feel its history. It has the conveniences of being the state’s capital, yet it retains a certain old-world charm. Visit it once, and you just might put down roots in a new or antique place of your own.

Work Gets Underway on $150M Wellness Resort in Mexico

Aug 15, 2008
By: Barbra Murray, Contributing Editor

Construction has commenced on Taheima Wellness Resort & Spa, a project in Nuevo Vallarta, Mexico, spearheaded by Whole In One Nuevo Vallarta S.A. de C.V. To be developed at a cost of $150 million, the upscale condo-hotel will ultimately feature 400 units. Whole In One is targeting the baby boomer set in North America and South America, highlighting the property's wellness-centric attributes.

Taheima sits on the El Tigre Golf Course fairway in Paradise Village, approximately 10 miles from Puerto Vallarta International Airport. In addition to space to accommodate offerings such as yoga, T'ai Chi and lectures ranging from cooking to public affairs, the resort destination will incorporate an outdoor amphitheater. Additionally, water will be a central theme, as the seaside property will feature swimming pools and lagoons, as well as sand-bottomed lakes and canals, from one end of the site to the other.

Mexico's resort market is teeming with activity. Last month Bald Mountain de Mexico SRL announced it had broken ground on Rosewood San Miguel de Allende, a 63-residence spa resort in San Miguel de Allende. In May, ING Real Estate revealed plans to join forces with Grupo Carrousel and Operadora Punta Maroma to develop a $150 million beachfront resort on Bahia Maroma, about 30 minutes from Cancun International Airport. The 254-acre property will consist of an 86-villa hotel, 127 residential units, a 10,000-square-foot clubhouse and an 18-hole signature golf course. The pipeline of lodging facility developments in Mexico as of the close of the first quarter included 136 projects accounting for 25,610 rooms, according to a recent report by hotel real estate research firm Lodging Econometrics.

Construction of Taheima is on target to reach completion in 2009. The project marks Whole IN One's first foray into the resort market.