Exceeding US$11.6 billion, private investment in Mexico’s tourism sector has already surpassed federal goals for the 2001 to 2006 period by 29 percent, reports Sectur in its latest comprehensive study on the subject. Domestic and foreign private investment reached the original US$9 billion goal in June 2005, after increasing at least 12 percent annually since 2002.
The report also shows that interest in Mexico’s famous beaches remains high, with the sun and beach segment outpacing all other tourism products by garnering 48 percent of private investment. Three coastal states also ranked in the top three in amount of private investment received: Guerrero State (US$2.63 billion), Quintana Roo State (US$2.47 billion) and Nayarit State (US$92.5 million) captured almost 52 percent of the total amount invested between 2001 and 2006.
Approximately 89 percent of private investment in Guerrero went to tried-and-true beach resort Acapulco on the Pacific Ocean, whereas 82 percent of the private investment Quintana Roo received was channeled to the Mexican Caribbean hot spots Cancun and Riviera Maya. More than 60 percent of Nayarit’s private investment went to the Pacific resort town of Nuevo Vallarta.
Rounding out the top Mexican five states receiving the highest amount of public investment are border states of Baja California (US$86.3 million) and Sonora (US$78.4 million). Together, the states on the U.S./Mexico border, which also include Chihuahua, Coahuila, Nuevo Leon and Tamaulipas, received 19 percent of private investment in Mexico, ranking the region second overall.
Among the northern region’s major tourism attractions are Copper Canyon in Chihuahua; the La Quemada archaeological sites in Zacatecas; the bustling city of Monterrey in Nuevo Leon and 200,000-acre Cuatro Cienegas Valley in Coahuila. International sources account for 25 percent of all private investment, with the United States as the top foreign investor in Mexico’s tourism infrastructure.
Mexico has long been taking strategic steps to stimulate tourism and attract private investors through its National Trust Fund for Tourism Development, Fonatur. This government agency is responsible for conceiving, planning and building five sea-side tourism destinations – Cancun, Los Cabos, Ixtapa, Loreto and the Bays of Huatulco – since its 1974 inception.
These resorts areas generate 54 percent of foreign revenue entering the country from tourism and benefit from a master plan, urban-resort planning mechanisms, and annual construction programs and enforcement.
Because fomenting international tourism is a national priority for Mexico, the country’s regulatory framework legally protects foreign investors. Mexico allows foreign investors to have ownership in the majority of economic fields and activities, including real estate, allowing 100 percent participation in shared capital. Investors are also offered a profitability guarantee and investment security through Fonatur.
In addition to the ease of investing in Mexico, investors are also attracted by the security of investing in a proven destination: Mexico is the world’s seventh most-visited country and ranks 12th in terms of foreign revenue earnings from tourism; in both categories, it is the leader in Latin America.
Fonatur’s efforts have been recognized by industry organizations such as the Live in Spain association, which honored the agency with its development and promotion of residential tourism award during the 2006 edition of the Madrid Real Estate Exhibition.
About Fonatur
Created in 1974, Mexico’s National Trust Fund for Tourism Development (Fonatur) is the premier developer of integrally-planned tourism destinations in Mexico and has created such world-class resort areas as Cancun, Ixtapa, Loreto, Los Cabos and more recently, Huatulco. To diversify the nation’s tourism industry and give it a more competitive edge, Fonatur builds and promotes new tourist resorts that meet market demand and at the same time spur social change in different parts of the country. Fonatur often serves a joint venture partner for private investors who want to benefit from participation in Mexico’s high-quality tourism development programs. For more information on Fonatur, visit www.fonatur.gob.mx.
About the Mexico Tourism Board
The Mexico Tourism Board (MTB) brings together the resources of federal and state governments, municipalities and private companies to promote Mexico’s tourism attractions and destinations internationally. Created in 1999, the MTB is Mexico’s tourism promotion agency, and its participants include members of both the private and public sectors. The MTB has offices throughout North America, Europe, Asia and Latin America.
Erick Laseca
Mexico Tourism Board
312-228-0517 x14
erick.laseca@bm.com
Thursday, December 17, 2009
Wednesday, December 9, 2009
Mexico Real Estate – Excellent Retirement Option for Strong Canadian Dollar
by Thomas Lloyd
Canadians who are thinking of retiring anytime in the near future have a unique option in the Mexico Real Estate market. While recent studies have shown that a good retirement can be planned within a very wide range of budgets, the facts that Mexico Real Estate available for excellent prices and that the cost of living in Mexico is relatively low make this point even more true for soon-to-be retired Canadians planning to make their retirement savings go as far as possible. These benefits have also been considerably strengthened recently by the considerable strength the Canadian dollar has gained recently, both against the American dollar and the Mexican peso, and also by a very high point in competition and sales prices in the real estate market in Canada.
Research in Canada has shown that Canadians can afford to retire on a very wide variety of budgets. One story tells how a woman complained that she only had $2 million saved, and it wasn't enough for her retirement; the woman beside her said she already had $200,000 and it was more than enough. The point is that each woman was able to live according her own needs. Whatever budget you're looking at for your retirement, property in Mexico offers a way to make this budget go further.
One of the main reasons why a budget will go further in Mexico now is the strength of the Canadian dollar. First of all, let's consider how the Canadian dollar has behaved recently. Only earlier this decade the dollar was down at a low of about 65 cents US. Little by little this began to rise, with a few ups and downs, and by December 2008, the Canadian dollar was hovering around 80 cents US. Starting around April this year, Canada's dollar jumped to above 90 cents in about to month, and then over the rest of the year it has risen to about 95 cents, as the chart below shows.
What does this mean for Canadians hoping to buy a Mexico property for their retirement? In most of the beachfront destinations, and other attractive retirement locations, properties are sold in American dollars, since they are geared towards the international market. A search in the Mexico MLS listings will show that retirement-friendly properties in international communities near the beachfront, or on a beautiful lake location, can be found for as low as $75,000 US, heading up to about $2,000,000 US.
Let's take a lower-middle price of about $400,000. If your budget 1 year ago allowed you to buy a beautiful, beachfront condo for $400,000 US with a pool, and many other luxuries, the strong Canadian dollar would now allow you close to $500,000, opening up many more options, or stepping up the luxury one notch. Or, on the other hand, you could buy that same property, which last year would have cost you $500,000 Canadian (with an 80 cent exchange rate), for about $416,000 Canadian, leaving you almost $85,000 more in savings for your retirement.
Also, let's consider what you'll get for that $400,000. Currently, in Toronto, which is seeing a condo boom, the large number of young buyers – who are still willing to put up with Canadian winters for a while – have pushed the prices up, and average unit runs just under $425,000. We must remember, these are just average prices; while a unit for about this price is definitely pleasant, in a Mexico beachfront location, a condo a this price can get you not only the same or higher level of style and comfort, but also many benefits such as pool, warm weather all year round, and, most importantly, a condo building with a beautiful ocean view, only steps away from soft, white beaches, that stretch out for miles on end, spotted with palm trees. And if you imagine a house for your retirement, large, beautiful homes of a variety of styles are available in key retirement destinations such La Paz, Playa del Carmen, Lake Chapala and many other for this price and less. Again, who can argue with warm weather, an ocean view, and a short walk to the beach? Of course, this $400,000 was an example, and these savings and benefits are true for any budget or lifestyle choice, whether lower or higher.
Remember those $85,000 you saved by buying a Mexico property with the strong Canadian dollar? They will go a long way in a Mexico Retirement. While the Canadian dollar has gained considerable strength on the American dollar, the Mexican peso has hovered just around 13 pesos per US dollar. This means that the Canadian dollar will also go a lot further here to cover day to day expenses and purchases. Large Mexican chains, and international stores such as Walmart offer many of the same products as we can find back home, but at Mexican prices. In general, groceries and many other products are already available at relatively lower prices in Mexico, the current strength of Canada's dollar will make this even more significant; lower cost of living can help to make your retirement budget more realistic.
Canadians who are thinking of retiring anytime in the near future have a unique option in the Mexico Real Estate market. While recent studies have shown that a good retirement can be planned within a very wide range of budgets, the facts that Mexico Real Estate available for excellent prices and that the cost of living in Mexico is relatively low make this point even more true for soon-to-be retired Canadians planning to make their retirement savings go as far as possible. These benefits have also been considerably strengthened recently by the considerable strength the Canadian dollar has gained recently, both against the American dollar and the Mexican peso, and also by a very high point in competition and sales prices in the real estate market in Canada.
Research in Canada has shown that Canadians can afford to retire on a very wide variety of budgets. One story tells how a woman complained that she only had $2 million saved, and it wasn't enough for her retirement; the woman beside her said she already had $200,000 and it was more than enough. The point is that each woman was able to live according her own needs. Whatever budget you're looking at for your retirement, property in Mexico offers a way to make this budget go further.
One of the main reasons why a budget will go further in Mexico now is the strength of the Canadian dollar. First of all, let's consider how the Canadian dollar has behaved recently. Only earlier this decade the dollar was down at a low of about 65 cents US. Little by little this began to rise, with a few ups and downs, and by December 2008, the Canadian dollar was hovering around 80 cents US. Starting around April this year, Canada's dollar jumped to above 90 cents in about to month, and then over the rest of the year it has risen to about 95 cents, as the chart below shows.
What does this mean for Canadians hoping to buy a Mexico property for their retirement? In most of the beachfront destinations, and other attractive retirement locations, properties are sold in American dollars, since they are geared towards the international market. A search in the Mexico MLS listings will show that retirement-friendly properties in international communities near the beachfront, or on a beautiful lake location, can be found for as low as $75,000 US, heading up to about $2,000,000 US.
Let's take a lower-middle price of about $400,000. If your budget 1 year ago allowed you to buy a beautiful, beachfront condo for $400,000 US with a pool, and many other luxuries, the strong Canadian dollar would now allow you close to $500,000, opening up many more options, or stepping up the luxury one notch. Or, on the other hand, you could buy that same property, which last year would have cost you $500,000 Canadian (with an 80 cent exchange rate), for about $416,000 Canadian, leaving you almost $85,000 more in savings for your retirement.
Also, let's consider what you'll get for that $400,000. Currently, in Toronto, which is seeing a condo boom, the large number of young buyers – who are still willing to put up with Canadian winters for a while – have pushed the prices up, and average unit runs just under $425,000. We must remember, these are just average prices; while a unit for about this price is definitely pleasant, in a Mexico beachfront location, a condo a this price can get you not only the same or higher level of style and comfort, but also many benefits such as pool, warm weather all year round, and, most importantly, a condo building with a beautiful ocean view, only steps away from soft, white beaches, that stretch out for miles on end, spotted with palm trees. And if you imagine a house for your retirement, large, beautiful homes of a variety of styles are available in key retirement destinations such La Paz, Playa del Carmen, Lake Chapala and many other for this price and less. Again, who can argue with warm weather, an ocean view, and a short walk to the beach? Of course, this $400,000 was an example, and these savings and benefits are true for any budget or lifestyle choice, whether lower or higher.
Remember those $85,000 you saved by buying a Mexico property with the strong Canadian dollar? They will go a long way in a Mexico Retirement. While the Canadian dollar has gained considerable strength on the American dollar, the Mexican peso has hovered just around 13 pesos per US dollar. This means that the Canadian dollar will also go a lot further here to cover day to day expenses and purchases. Large Mexican chains, and international stores such as Walmart offer many of the same products as we can find back home, but at Mexican prices. In general, groceries and many other products are already available at relatively lower prices in Mexico, the current strength of Canada's dollar will make this even more significant; lower cost of living can help to make your retirement budget more realistic.
U.S. Starts Pulling out of Recession – Ideal Time for Mexico Real Estate Buyers to Make Their Move
by Thomas Lloyd
Estate you will already know that in the third quarter of this year, the U.S. economy appears to be pulling out of the recession, with an annualized growth of 3.5%, and a Gross Domestic Product (GDP) exceeding the expectations of most analysts and showing a growth of 3%. While this is big news in many ways, it is also an important consideration for your Mexico Real Estate purchase.
If you are buying a Mexico property these days, one of the factors you are most certainly considering are the attractive reduction available on that beautiful beachfront condo, perfect for your retirement or as a second home the winter months. These kind of special deals are being offered in many key Mexico Real Estate destinations for many property types. Also, there is large selection created by a lack of buyers over the past two years. Right now many locations offer a true buyer's market. These are certainly attractive motivations to buy.
Now let's consider the current economic situation. The U.S. economy grew at an annualized rate of 3.5% in the third quarter of this year, which is the first positive result in one year, and the biggest growth in two years, as reported by the Commerce Department in the last week of October.
Between June 2008 and June 2009, the economy had contracted 3.8%, the worst performance in seven decades. The long-awaited shift ended four consecutive quarters of economic contraction, the first time this has happened since 1947, when records of these statistics were first made.
The numbers show that the recession has quite probably ended, and the economic situation for buyers is starting to improve. Of course, we have to consider the fact that, as President Obama has pointed out, the economy has pulled out of reverse, but there is still a long way to go for recovery, which has just begun.
As this happens, of course there will still great property options, but just not as many, and without the great price reductions we are seeing now.
As a buyer, where would you rather be – buying your second home now with all the options you could want, and at great prices and with attractive buying incentives, or later when you demand and competition from other buyers begins to remove the advantages you as a buyer have now? If you are thinking about buying your second home on the beachfront, or if you are ready to start planning for your retirement in Mexico, start your property search now so you can take your time in the search, and find that property perfect for you as the buyer, while you still have the many advantages the market offers now. Contact TOPMexicoRealEstate.com, "Your Expert Property-Finders," to find the information and guidance you need.
TOPMexicoRealEstate NETWORK; Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely
About the Author:
Mexico Real Estate NETWORK; "Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!" Region: Playa del Carmen Real Estate by Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. You can contact him at (512) 879-6546.
Estate you will already know that in the third quarter of this year, the U.S. economy appears to be pulling out of the recession, with an annualized growth of 3.5%, and a Gross Domestic Product (GDP) exceeding the expectations of most analysts and showing a growth of 3%. While this is big news in many ways, it is also an important consideration for your Mexico Real Estate purchase.
If you are buying a Mexico property these days, one of the factors you are most certainly considering are the attractive reduction available on that beautiful beachfront condo, perfect for your retirement or as a second home the winter months. These kind of special deals are being offered in many key Mexico Real Estate destinations for many property types. Also, there is large selection created by a lack of buyers over the past two years. Right now many locations offer a true buyer's market. These are certainly attractive motivations to buy.
Now let's consider the current economic situation. The U.S. economy grew at an annualized rate of 3.5% in the third quarter of this year, which is the first positive result in one year, and the biggest growth in two years, as reported by the Commerce Department in the last week of October.
Between June 2008 and June 2009, the economy had contracted 3.8%, the worst performance in seven decades. The long-awaited shift ended four consecutive quarters of economic contraction, the first time this has happened since 1947, when records of these statistics were first made.
The numbers show that the recession has quite probably ended, and the economic situation for buyers is starting to improve. Of course, we have to consider the fact that, as President Obama has pointed out, the economy has pulled out of reverse, but there is still a long way to go for recovery, which has just begun.
As this happens, of course there will still great property options, but just not as many, and without the great price reductions we are seeing now.
As a buyer, where would you rather be – buying your second home now with all the options you could want, and at great prices and with attractive buying incentives, or later when you demand and competition from other buyers begins to remove the advantages you as a buyer have now? If you are thinking about buying your second home on the beachfront, or if you are ready to start planning for your retirement in Mexico, start your property search now so you can take your time in the search, and find that property perfect for you as the buyer, while you still have the many advantages the market offers now. Contact TOPMexicoRealEstate.com, "Your Expert Property-Finders," to find the information and guidance you need.
TOPMexicoRealEstate NETWORK; Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely
About the Author:
Mexico Real Estate NETWORK; "Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!" Region: Playa del Carmen Real Estate by Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. You can contact him at (512) 879-6546.
Monday, November 30, 2009
$501 Million Investment In Mexican Real Estate
By: Investment Properties Mexico In a move that will be seen as massive vote of confidence in the Mexico investment and property markets, international financial services giant, Prudential Financial Inc, plans to raise around $501 million to invest in Mexico real estate.
The brokerage division of Mexico’s top bank, BBVA Bancomer, said last week that it was working for Prudential’s real estate investment arm to list an infrastructure trust on the Mexican stock exchange to raise the funds.
The Mexico investment bank said, “Mexico’s industrial [property] market is well positioned to benefit from the coming economic recovery in the medium term.”
The Prumex Industrial III real estate fund will use the money raised from the placing to buy and develop industrial Mexico investment properties.
Paulo Gomez, spokesman for Prudential Real Estate Investors (PREI) Latin America, told Dow Jones newswire that the fund will go to market in the next four months and should be completely invested over a period of five years.
According to a press release from BBVA Bancomer the target internal rate of return is 16% to 22% with a yield of 8% to 12%.
PREI has been investing in Latin America and Mexico real estate since 2000. They manage funds in the industrial, residential, and retail real estate sectors in Mexico and Brazil with gross assets under management in Latin America of over $2.6 billion.
The announcement follows comments from international investors and credit rating agencies that the Mexican government’s new fiscal package will ensure funds continue to flow into Mexico investments.
Article from Investment Properties Mexico, experts in investment real estate in Mexico. For information email info [at] investmentpropertiesmexico.com, call Mexico (984) 802-8336 or USA (561) 459-5448, or visit their website for more on Mexico investment
The brokerage division of Mexico’s top bank, BBVA Bancomer, said last week that it was working for Prudential’s real estate investment arm to list an infrastructure trust on the Mexican stock exchange to raise the funds.
The Mexico investment bank said, “Mexico’s industrial [property] market is well positioned to benefit from the coming economic recovery in the medium term.”
The Prumex Industrial III real estate fund will use the money raised from the placing to buy and develop industrial Mexico investment properties.
Paulo Gomez, spokesman for Prudential Real Estate Investors (PREI) Latin America, told Dow Jones newswire that the fund will go to market in the next four months and should be completely invested over a period of five years.
According to a press release from BBVA Bancomer the target internal rate of return is 16% to 22% with a yield of 8% to 12%.
PREI has been investing in Latin America and Mexico real estate since 2000. They manage funds in the industrial, residential, and retail real estate sectors in Mexico and Brazil with gross assets under management in Latin America of over $2.6 billion.
The announcement follows comments from international investors and credit rating agencies that the Mexican government’s new fiscal package will ensure funds continue to flow into Mexico investments.
Article from Investment Properties Mexico, experts in investment real estate in Mexico. For information email info [at] investmentpropertiesmexico.com, call Mexico (984) 802-8336 or USA (561) 459-5448, or visit their website for more on Mexico investment
Tuesday, October 27, 2009
Medical Tourism And JCI Accreditation
By: Khaki Scott
Joint Commission International is a non-governmental organization whose mission it is to “continuously improve health care for the public, in collaboration with other stakeholders, by evaluating health care organizations and inspiring them to excel in providing safe and effective care of the highest quality and value.” Their efforts stem from a long history of professional health care providers who saw the need for standardization and improvement of care as early as 1910. As the world has grown smaller, Joint Commission International has broadened its reach to include every health care specialty, as well as to include hospitals and health care facilities around the world.
When Mexico Real Estate Investment ran our first story on Joint Commission International accredited medical facilities in Mexico, there were only two and they were both in Monterrey, Nuevo Leon. Today, in September 2009, there are a total of eight JCI accredited medical facilities in Mexico and more on the way. These internationally accredited medical facilities include:
In Mexico City: Both of the ABC Hospitals are accredited by Joint Commission and are a part of the Methodist International Hospital Network.
American British Cowdray Medical Center IAP – Observatorio Campus, The
Mexico City, Mexico
Program: Hospital
First Accredited: Dec. 6, 2008
American British Cowdray Medical Center IAP – Santa Fe Campus, The
Mexico City, Mexico
Program: Hospital
First Accredited: Dec. 12, 2008
The CHRISTUS hospitals are a chain that is owned and operated by the CHRISTUS Foundation, a Catholic non-profit organization. They now have 7 hospitals, 27 Clinics, a very modern ambulance service, 2 Rehabilitation and Physical Therapy Centers, and 7 Social Assistance Clinics in Mexico, as well as hospitals throughout Texas, Louisiana, Arkansas, and Mississippi.
Christus Muguerza Alta Especialidad
Monterrey, Mexico
Program: Hospital
First Accredited: July 22, 2007
Hospital CIMA Monterrey
San Pedro Garza Garza, Nuevo Leon
Program: Hospital
First Accredited: Dec. 19, 2008
Hospital CIMA Hermosillo
Hermosillo, Sonora
Program: Hospital
First Accredited: Dec. 11, 2008
Hospital San Jose Tec de Monterrey
Monterrey, Nuevo Leon
Program: Hospital
First Accredited: Dec. 25, 2007
Hospital Y Clinica OCA, S.A. de C.V.
Monterrey, Nuevo Leon
Program: Hospital
First Accredited: Sept. 27, 2008
Clinica Cumbres Chihuahua
Chihuahua, Mexico
Program: Ambulatory Care
First Accredited: April 23, 2008
These are, by no means, the only good hospitals in Mexico. There are thousands of excellent hospitals throughout the nation, as well as internationally recognized university teaching hospitals. As one would do in one’s home country, before choosing a hospital in Mexico, please do as much of an investigation of their reputation within the hospital and expat communities as possible. With that one caution, there is no reason not to choose Mexico for elective medical services and certainly no reason to fear them in case of emergency.
(source: Joint Commission International)
Joint Commission International is a non-governmental organization whose mission it is to “continuously improve health care for the public, in collaboration with other stakeholders, by evaluating health care organizations and inspiring them to excel in providing safe and effective care of the highest quality and value.” Their efforts stem from a long history of professional health care providers who saw the need for standardization and improvement of care as early as 1910. As the world has grown smaller, Joint Commission International has broadened its reach to include every health care specialty, as well as to include hospitals and health care facilities around the world.
When Mexico Real Estate Investment ran our first story on Joint Commission International accredited medical facilities in Mexico, there were only two and they were both in Monterrey, Nuevo Leon. Today, in September 2009, there are a total of eight JCI accredited medical facilities in Mexico and more on the way. These internationally accredited medical facilities include:
In Mexico City: Both of the ABC Hospitals are accredited by Joint Commission and are a part of the Methodist International Hospital Network.
American British Cowdray Medical Center IAP – Observatorio Campus, The
Mexico City, Mexico
Program: Hospital
First Accredited: Dec. 6, 2008
American British Cowdray Medical Center IAP – Santa Fe Campus, The
Mexico City, Mexico
Program: Hospital
First Accredited: Dec. 12, 2008
The CHRISTUS hospitals are a chain that is owned and operated by the CHRISTUS Foundation, a Catholic non-profit organization. They now have 7 hospitals, 27 Clinics, a very modern ambulance service, 2 Rehabilitation and Physical Therapy Centers, and 7 Social Assistance Clinics in Mexico, as well as hospitals throughout Texas, Louisiana, Arkansas, and Mississippi.
Christus Muguerza Alta Especialidad
Monterrey, Mexico
Program: Hospital
First Accredited: July 22, 2007
Hospital CIMA Monterrey
San Pedro Garza Garza, Nuevo Leon
Program: Hospital
First Accredited: Dec. 19, 2008
Hospital CIMA Hermosillo
Hermosillo, Sonora
Program: Hospital
First Accredited: Dec. 11, 2008
Hospital San Jose Tec de Monterrey
Monterrey, Nuevo Leon
Program: Hospital
First Accredited: Dec. 25, 2007
Hospital Y Clinica OCA, S.A. de C.V.
Monterrey, Nuevo Leon
Program: Hospital
First Accredited: Sept. 27, 2008
Clinica Cumbres Chihuahua
Chihuahua, Mexico
Program: Ambulatory Care
First Accredited: April 23, 2008
These are, by no means, the only good hospitals in Mexico. There are thousands of excellent hospitals throughout the nation, as well as internationally recognized university teaching hospitals. As one would do in one’s home country, before choosing a hospital in Mexico, please do as much of an investigation of their reputation within the hospital and expat communities as possible. With that one caution, there is no reason not to choose Mexico for elective medical services and certainly no reason to fear them in case of emergency.
(source: Joint Commission International)
Saturday, October 24, 2009
Medicare Savings: Is the Answer in Mexico?
The words Medicare savings are a red flag to some and a carrot to others; depending on where you stand on the issue of health-care reform, the label is code for cuts or a promise to root out fraud and save billions. But far away from the debates in Washington, a group of expatriate baby boomers point to one place they believe real Medicare savings could be realized: Mexico.
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Paul Crist, the owner of a Puerto Vallarta resort who once worked as an aide to former U.S. Senator Paul Sarbanes, says that paying for medical treatment in Mexico could save Medicare almost a quarter of the average cost for most procedures. "My research, as well as the research of others, shows that health care in Mexico costs less than a third of that in the U.S.," Crist says.
(See a guide to what health-care reform really means.)
A doctor's office visit or house call (still a common practice in Mexico) costs only $25 to $40, according to a 2007 study by the University of Texas LBJ School of Public Affairs. The same study presented information on comparative costs for common procedures: a hip replacement costs between $43,000 and $63,000 in the U.S., compared to $12,000 in Mexico, according to Texas-based hospital chain Christus Muguerza, which also operates in Mexico; a coronary bypass in Mexico costs an average of $21,000 compared to $149,000 in the U.S. Citing statistics from the U.S. census and State Department, Crist estimates approximately 200,000 of the 1 million U.S. citizens living south of the border are Medicare-eligible.
(See what health care is like around the world.)
However, Crist says many Medicare-eligible expats living south of the border are forced to fly back to the U.S. for medical treatment because Medicare will not pay for most coverage outside the U.S., even though they have paid into the system during their working lives. Medicare will cover only emergency care if it occurs within 60 days of leaving the country. To utilize their benefits, Medicare-eligible American citizens in Mexico have to opt for periodic flights home or else choose to pay out-of-pocket medical expenses. And because expatriates have diverse geographic origins in the U.S., there are no specific congressional districts they can pressure to legislate change in the Medicare rules on their behalf.
Crist took matters into his own hands. Touting the potential savings to Medicare, he founded Americans for Medicare in Mexico and began campaigning for reform. He travelled to Washington earlier this year to lobby Congress for expansion of Medicare to expats in Mexico. He visited about 85 congressional offices and says many members were open to the idea. Other expat groups like the Association of American Residents Overseas (AARO) joined in a letter-writing campaign. But as the health-care-reform battle grew larger and the bills more complex, Crist says supportive members of Congress told him 2009 was not going to be the year the change could be made.
Resistance to the expansion of Medicare to Mexico is coming from some health-care industry groups like the American Medical Association and the American Hospital Association, according to David C. Warner, who teaches public affairs at the University of Texas LBJ School. Warner says these groups see it as the beginning of a slippery slope that will lead to expansion of Medicare coverage to places like China and Eastern Europe where health-care costs are rock bottom.
(See a video of Ze Frank explaining health-care reform.)
Warner adds that the issue also has been raised at the highest levels by Mexican President Felipe Calderón in a meeting earlier this year with President Barack Obama. But any pressure from Mexican interests could be politically tricky, Crist says: "It would not necessarily be helpful to have Mexican firms pressuring Congress on an issue that will benefit this industry and the Mexican economy generally. This could create a backlash among some [U.S.] political groups."
However, there are several forces set to join the battle that could change the power balance. Not only are more expats finding Mexico's climate and low costs welcoming, but investors are flocking to Mexico as a growth market for health care and senior living. "Many in the baby-boomer generation have seen their retirement savings disappear and it is not likely those funds will be built back up quickly," Crist says, explaining why Mexico, with its low costs, has become attractive. Seeing potential profits, he adds, "the developers and operators of senior housing, which runs the spectrum from independent-living communities through nursing-care facilities, are certainly betting on a substantial influx in the coming years." Developments aimed at attracting seniors have been built near Puerto Vallarta and in the northern Baja peninsula, and independent-living projects are planned for San Miguel de Allende, already a popular expat center north of Mexico City, Warner notes.
(See the top 10 health-care-reform players.)
"Some of the developers in Mexico are affiliated with firms in the U.S., so there will certainly be support in Washington from those firms," Crist says. "Both the senior-housing industry and the health-care industry are internationalizing, and the U.S. players in these industries will be big winners. They have the capital, and the experience to dominate this industry in Mexico and elsewhere, because the senior-housing industry, in particular, is so new in many countries."
Crist plans to hold town-hall meetings in 15 Mexican cities beginning January to pull the expat community together and launch a massive letter-writing campaign. He and other proponents are also hoping to engage another key group in the fight, the so-called returnees — Mexican dual citizens, or Mexican-born citizens with legal status in the U.S. who are Medicare-eligible after a lifetime of payroll contributions. In the U.S., proponents will focus on gaining the support of a key member of Congress to carry the banner. Warner says two from Texas are likely targets: Democratic U.S. Representative Eddie Bernice Johnson and Republican U.S. Representative Pete Sessions, whose districts include concentrated returnee populations, multigenerational families with roots in the state of Guanajuato, Mexico, the cradle of Mexican independence and a favorite spot for expat retirees.
"The opportunity to provide services to Americans at much lower cost outside the U.S. border is enormous," Crist says. "This is pushing even private insurers to explore coverage options outside of the U.S., and Medicare will certainly be a part of this globalization, sooner or later. My preference is for sooner."
By Hilary Hylton
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Paul Crist, the owner of a Puerto Vallarta resort who once worked as an aide to former U.S. Senator Paul Sarbanes, says that paying for medical treatment in Mexico could save Medicare almost a quarter of the average cost for most procedures. "My research, as well as the research of others, shows that health care in Mexico costs less than a third of that in the U.S.," Crist says.
(See a guide to what health-care reform really means.)
A doctor's office visit or house call (still a common practice in Mexico) costs only $25 to $40, according to a 2007 study by the University of Texas LBJ School of Public Affairs. The same study presented information on comparative costs for common procedures: a hip replacement costs between $43,000 and $63,000 in the U.S., compared to $12,000 in Mexico, according to Texas-based hospital chain Christus Muguerza, which also operates in Mexico; a coronary bypass in Mexico costs an average of $21,000 compared to $149,000 in the U.S. Citing statistics from the U.S. census and State Department, Crist estimates approximately 200,000 of the 1 million U.S. citizens living south of the border are Medicare-eligible.
(See what health care is like around the world.)
However, Crist says many Medicare-eligible expats living south of the border are forced to fly back to the U.S. for medical treatment because Medicare will not pay for most coverage outside the U.S., even though they have paid into the system during their working lives. Medicare will cover only emergency care if it occurs within 60 days of leaving the country. To utilize their benefits, Medicare-eligible American citizens in Mexico have to opt for periodic flights home or else choose to pay out-of-pocket medical expenses. And because expatriates have diverse geographic origins in the U.S., there are no specific congressional districts they can pressure to legislate change in the Medicare rules on their behalf.
Crist took matters into his own hands. Touting the potential savings to Medicare, he founded Americans for Medicare in Mexico and began campaigning for reform. He travelled to Washington earlier this year to lobby Congress for expansion of Medicare to expats in Mexico. He visited about 85 congressional offices and says many members were open to the idea. Other expat groups like the Association of American Residents Overseas (AARO) joined in a letter-writing campaign. But as the health-care-reform battle grew larger and the bills more complex, Crist says supportive members of Congress told him 2009 was not going to be the year the change could be made.
Resistance to the expansion of Medicare to Mexico is coming from some health-care industry groups like the American Medical Association and the American Hospital Association, according to David C. Warner, who teaches public affairs at the University of Texas LBJ School. Warner says these groups see it as the beginning of a slippery slope that will lead to expansion of Medicare coverage to places like China and Eastern Europe where health-care costs are rock bottom.
(See a video of Ze Frank explaining health-care reform.)
Warner adds that the issue also has been raised at the highest levels by Mexican President Felipe Calderón in a meeting earlier this year with President Barack Obama. But any pressure from Mexican interests could be politically tricky, Crist says: "It would not necessarily be helpful to have Mexican firms pressuring Congress on an issue that will benefit this industry and the Mexican economy generally. This could create a backlash among some [U.S.] political groups."
However, there are several forces set to join the battle that could change the power balance. Not only are more expats finding Mexico's climate and low costs welcoming, but investors are flocking to Mexico as a growth market for health care and senior living. "Many in the baby-boomer generation have seen their retirement savings disappear and it is not likely those funds will be built back up quickly," Crist says, explaining why Mexico, with its low costs, has become attractive. Seeing potential profits, he adds, "the developers and operators of senior housing, which runs the spectrum from independent-living communities through nursing-care facilities, are certainly betting on a substantial influx in the coming years." Developments aimed at attracting seniors have been built near Puerto Vallarta and in the northern Baja peninsula, and independent-living projects are planned for San Miguel de Allende, already a popular expat center north of Mexico City, Warner notes.
(See the top 10 health-care-reform players.)
"Some of the developers in Mexico are affiliated with firms in the U.S., so there will certainly be support in Washington from those firms," Crist says. "Both the senior-housing industry and the health-care industry are internationalizing, and the U.S. players in these industries will be big winners. They have the capital, and the experience to dominate this industry in Mexico and elsewhere, because the senior-housing industry, in particular, is so new in many countries."
Crist plans to hold town-hall meetings in 15 Mexican cities beginning January to pull the expat community together and launch a massive letter-writing campaign. He and other proponents are also hoping to engage another key group in the fight, the so-called returnees — Mexican dual citizens, or Mexican-born citizens with legal status in the U.S. who are Medicare-eligible after a lifetime of payroll contributions. In the U.S., proponents will focus on gaining the support of a key member of Congress to carry the banner. Warner says two from Texas are likely targets: Democratic U.S. Representative Eddie Bernice Johnson and Republican U.S. Representative Pete Sessions, whose districts include concentrated returnee populations, multigenerational families with roots in the state of Guanajuato, Mexico, the cradle of Mexican independence and a favorite spot for expat retirees.
"The opportunity to provide services to Americans at much lower cost outside the U.S. border is enormous," Crist says. "This is pushing even private insurers to explore coverage options outside of the U.S., and Medicare will certainly be a part of this globalization, sooner or later. My preference is for sooner."
By Hilary Hylton
Monday, October 12, 2009
Attention Canadians: The Time is Now and The Place is Mexico!
By: Jim Scherrer
For more than 50 years, the de facto world currency has been the US dollar with many of the world currencies being pegged against it (some countries have even eliminated their own currencies in favor of the US dollar). As an example, Canadians feel a sense of wealth when the Canadian dollar is on par with the US dollar; the opposite when the Canadian dollar devalues to .70 US dollar, i.e., when the Canadian dollar will purchase only 70 cents worth of US goods and services. The following graph shows how the Canadian dollar has strengthened from $.77 US to $.96 US or by 25% during just the past seven months.
Currently, the global economy is changing and as the US dollar continues to erode, many foreign currencies have strengthened significantly relative to the green back. Consequently, savvy Canadians should now be looking at currencies outside of the US and evaluating their own newfound purchasing power in those foreign countries. For instance, the Canadian dollar has virtually exploded in value recently relative to the Mexican peso. The graph below depicts how the Canadian dollar has risen in value from an equivalent of 7.1 Mexican pesos in 2003 to 12.6 pesos today in 2009.
Now, let's compare this increase in the purchasing power of the Canadian dollar to the increase in purchasing power of the US dollar, both relative to the Mexican peso. The graph below clearly shows that during this 6 ½ year time frame the US dollar increased in value by a bit more than 20% relative to the Mexican peso whereas the Canadian dollar increased by a whopping 75%!
It's quite understandable, that toward the end of 2007 when the Canadian dollar reached par with the US dollar, the Canadians were major buyers of real estate in Mexico. However, by March of 2009, the Canadian dollar had slipped to a low of $.77 US and Canadian buyers were virtually eliminated from the Mexican real estate market.
Next, let's closely review the Canadian and US dollars relative to the Mexican peso during the past year. Because the recent strengthening of the Canadian dollar has far outpaced the US dollar relative to the Mexican peso, you'll see that during the past year, the US dollar has barely appreciated in value over the Mexican peso while the Canadian dollar has exploded in value by nearly 25%. (please see graph) The ramifications that this phenomenon has had on the Canadian purchasing power in Mexico are addressed below.
During the past decade many tourist zones and retirement havens in the resort areas of Mexico experienced exponential growth. Along with this growth came significant real estate price appreciation; so much so that real estate prices in many Mexican resort cities were no longer within reach of many Canadian retirees, especially when the Canadian dollar plummeted in value in 2008. Well, we have good news for you fortunate Canadians holding those wonderfully strong Loonies; that's no longer the case!
In Puerto Vallarta, real estate prices of recently built condos have dropped by anywhere from 20-35% during the past year alone. This reduction in value was caused mainly by the global recession, however the swine flu scare and the media hype over the border town drug war (1,200 miles away!) were also contributing factors. With the tremendous glut of unsold new condos recently introduced to the market by developers combined with the many condos that were purchased at pre-construction prices by speculators now just trying to recover their investment, PV is a true buyer's market.
Last year you could buy a $400,000 condo with all the amenities and breathtaking views for 10% off list price or for $360,000. Today, you'll have no problem finding that same condo offered at $300,000. Okay, that seems like a pretty nice savings of nearly 17% but remember, these Mexican condos are all priced in US dollars; Canadians must now evaluate these costs in terms of Canadian dollars! A year ago when the Canadian dollar was worth $.77 US, $360,000 US dollars was equivalent to $468,000 Canadian dollars. Today, with the same condo selling for $300,000 and the Canadian dollar worth $.96 US, it will cost only $315,000 Canadian dollars. That's a savings of $153,000 Canadian or 32.7% (as opposed to the apparent 17%) in just one year!
Until as recently as 4 years ago there were no mortgages available to any North Americans buying resort property in Mexico. At that time, a number of US based mortgage companies introduced mortgages to US citizens buying property in Mexico but not to Canadians. That all changed a couple of years ago when the major mortgage companies finally made the same mortgages available to Canadians. These fixed and variable rate mortgages require at least 20% down and can have terms for as long as 30 years at rates generally about two points above those in the States or at approximately 7% at this time.
It is the opinion of many that the Canadian dollar will continue to strengthen. After all, the Canadian banks didn't make all the foolish sub-prime no-doc loans that were made in the US, the Canadian unemployment rate is somewhat less than in the US, and Canada is rich with natural resources with worldwide demand. Knowing this, it seems only logical that having a mortgage in Mexico based on US dollars would be a very wise investment; it would be paid off with ever strengthening Canadian dollars.
Let's assume we bought that condo for $300,000 US ($315,000 Canadian) and made a down payment of $100,000 US ($105,000 Canadian). A 30 year fixed rate 8% mortgage of $200,000US would result in payments of $1,467/month US ($1,528 Canadian). Of course, if and when the Canadian dollar again reaches par with the US dollar, your payments will be reduced from $1,528 to $1,467 Canadian. Now, let's get a little aggressive and assume the Canadian dollar will reach $1.05US. At that exchange rate, your monthly mortgage payments would drop to $1,397 Canadian. It's not too far a stretch to predict an annual savings of $2,000 Canadian or more based solely on the exchange rate differential. Of course, if the Canadian dollar were to plummet for some unforeseeable reason, these mortgages can be paid off after 2-5 years (depending upon the loan) with no pre-payment penalty.
Finally, let's evaluate the cost of living in Mexico. For starters, let's assume that a year ago we were considering a lifestyle in Vallarta based on a budget of $10,000 pesos per month. With the annual inflation rate in Mexico of 5%, the same goods and services in Mexico will be $10,500 pesos this year. A little more than a year ago, when the Canadian dollar would purchase 9.5 pesos, $10,000 pesos was equivalent to $1,052 Canadian. Today, with the favorable exchange rate of 12.7 pesos per Canadian dollar, the $10,500 peso budget will cost a mere $827 Canadian, i.e., a savings of $225/mo or a 22% reduction in the cost of living in just one year!
In summarizing, it's obvious that the time has never been better for Canadians to explore the opportunities that exist in Mexico today. International monetary circumstances are ideal for Canadians concurrently with the condo supply and demand equation in Mexico heavily tilted in favor of the buyer. In terms of Canadian dollars, you can expect to find incredible condos at 30-35% lower prices than just a year ago and your cost of living will be 20-25% less than it was a year ago.
Of the nearly 50,000 expats living in Vallarta, we estimate that close to 30% of them are Canadians. Needless to say, the winter weather in Puerto Vallarta is more conducive to most outdoor activities (excluding snow boarding and ice hockey!) than anywhere in Canada. So, why hesitate? Come on down this winter and have some fun in the sun with your fellow countrymen and while doing so, save a significant portion of your nest egg on your retirement residence in Paradise. It's now certainly well within your financial reach and as they say, "if you snooze, you lose"; you'll never find a better time or place to invest those Loonies than now in Mexico!
Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of nearly 70 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.
For more than 50 years, the de facto world currency has been the US dollar with many of the world currencies being pegged against it (some countries have even eliminated their own currencies in favor of the US dollar). As an example, Canadians feel a sense of wealth when the Canadian dollar is on par with the US dollar; the opposite when the Canadian dollar devalues to .70 US dollar, i.e., when the Canadian dollar will purchase only 70 cents worth of US goods and services. The following graph shows how the Canadian dollar has strengthened from $.77 US to $.96 US or by 25% during just the past seven months.
Currently, the global economy is changing and as the US dollar continues to erode, many foreign currencies have strengthened significantly relative to the green back. Consequently, savvy Canadians should now be looking at currencies outside of the US and evaluating their own newfound purchasing power in those foreign countries. For instance, the Canadian dollar has virtually exploded in value recently relative to the Mexican peso. The graph below depicts how the Canadian dollar has risen in value from an equivalent of 7.1 Mexican pesos in 2003 to 12.6 pesos today in 2009.
Now, let's compare this increase in the purchasing power of the Canadian dollar to the increase in purchasing power of the US dollar, both relative to the Mexican peso. The graph below clearly shows that during this 6 ½ year time frame the US dollar increased in value by a bit more than 20% relative to the Mexican peso whereas the Canadian dollar increased by a whopping 75%!
It's quite understandable, that toward the end of 2007 when the Canadian dollar reached par with the US dollar, the Canadians were major buyers of real estate in Mexico. However, by March of 2009, the Canadian dollar had slipped to a low of $.77 US and Canadian buyers were virtually eliminated from the Mexican real estate market.
Next, let's closely review the Canadian and US dollars relative to the Mexican peso during the past year. Because the recent strengthening of the Canadian dollar has far outpaced the US dollar relative to the Mexican peso, you'll see that during the past year, the US dollar has barely appreciated in value over the Mexican peso while the Canadian dollar has exploded in value by nearly 25%. (please see graph) The ramifications that this phenomenon has had on the Canadian purchasing power in Mexico are addressed below.
During the past decade many tourist zones and retirement havens in the resort areas of Mexico experienced exponential growth. Along with this growth came significant real estate price appreciation; so much so that real estate prices in many Mexican resort cities were no longer within reach of many Canadian retirees, especially when the Canadian dollar plummeted in value in 2008. Well, we have good news for you fortunate Canadians holding those wonderfully strong Loonies; that's no longer the case!
In Puerto Vallarta, real estate prices of recently built condos have dropped by anywhere from 20-35% during the past year alone. This reduction in value was caused mainly by the global recession, however the swine flu scare and the media hype over the border town drug war (1,200 miles away!) were also contributing factors. With the tremendous glut of unsold new condos recently introduced to the market by developers combined with the many condos that were purchased at pre-construction prices by speculators now just trying to recover their investment, PV is a true buyer's market.
Last year you could buy a $400,000 condo with all the amenities and breathtaking views for 10% off list price or for $360,000. Today, you'll have no problem finding that same condo offered at $300,000. Okay, that seems like a pretty nice savings of nearly 17% but remember, these Mexican condos are all priced in US dollars; Canadians must now evaluate these costs in terms of Canadian dollars! A year ago when the Canadian dollar was worth $.77 US, $360,000 US dollars was equivalent to $468,000 Canadian dollars. Today, with the same condo selling for $300,000 and the Canadian dollar worth $.96 US, it will cost only $315,000 Canadian dollars. That's a savings of $153,000 Canadian or 32.7% (as opposed to the apparent 17%) in just one year!
Until as recently as 4 years ago there were no mortgages available to any North Americans buying resort property in Mexico. At that time, a number of US based mortgage companies introduced mortgages to US citizens buying property in Mexico but not to Canadians. That all changed a couple of years ago when the major mortgage companies finally made the same mortgages available to Canadians. These fixed and variable rate mortgages require at least 20% down and can have terms for as long as 30 years at rates generally about two points above those in the States or at approximately 7% at this time.
It is the opinion of many that the Canadian dollar will continue to strengthen. After all, the Canadian banks didn't make all the foolish sub-prime no-doc loans that were made in the US, the Canadian unemployment rate is somewhat less than in the US, and Canada is rich with natural resources with worldwide demand. Knowing this, it seems only logical that having a mortgage in Mexico based on US dollars would be a very wise investment; it would be paid off with ever strengthening Canadian dollars.
Let's assume we bought that condo for $300,000 US ($315,000 Canadian) and made a down payment of $100,000 US ($105,000 Canadian). A 30 year fixed rate 8% mortgage of $200,000US would result in payments of $1,467/month US ($1,528 Canadian). Of course, if and when the Canadian dollar again reaches par with the US dollar, your payments will be reduced from $1,528 to $1,467 Canadian. Now, let's get a little aggressive and assume the Canadian dollar will reach $1.05US. At that exchange rate, your monthly mortgage payments would drop to $1,397 Canadian. It's not too far a stretch to predict an annual savings of $2,000 Canadian or more based solely on the exchange rate differential. Of course, if the Canadian dollar were to plummet for some unforeseeable reason, these mortgages can be paid off after 2-5 years (depending upon the loan) with no pre-payment penalty.
Finally, let's evaluate the cost of living in Mexico. For starters, let's assume that a year ago we were considering a lifestyle in Vallarta based on a budget of $10,000 pesos per month. With the annual inflation rate in Mexico of 5%, the same goods and services in Mexico will be $10,500 pesos this year. A little more than a year ago, when the Canadian dollar would purchase 9.5 pesos, $10,000 pesos was equivalent to $1,052 Canadian. Today, with the favorable exchange rate of 12.7 pesos per Canadian dollar, the $10,500 peso budget will cost a mere $827 Canadian, i.e., a savings of $225/mo or a 22% reduction in the cost of living in just one year!
In summarizing, it's obvious that the time has never been better for Canadians to explore the opportunities that exist in Mexico today. International monetary circumstances are ideal for Canadians concurrently with the condo supply and demand equation in Mexico heavily tilted in favor of the buyer. In terms of Canadian dollars, you can expect to find incredible condos at 30-35% lower prices than just a year ago and your cost of living will be 20-25% less than it was a year ago.
Of the nearly 50,000 expats living in Vallarta, we estimate that close to 30% of them are Canadians. Needless to say, the winter weather in Puerto Vallarta is more conducive to most outdoor activities (excluding snow boarding and ice hockey!) than anywhere in Canada. So, why hesitate? Come on down this winter and have some fun in the sun with your fellow countrymen and while doing so, save a significant portion of your nest egg on your retirement residence in Paradise. It's now certainly well within your financial reach and as they say, "if you snooze, you lose"; you'll never find a better time or place to invest those Loonies than now in Mexico!
Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of nearly 70 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.
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