Financial markets…tanking. Real-estate market…tanked. What’s a home-buying trader to do? Flee to Mexico, where the beer is cold, the sand is white and the high-end homes actually maintain some of their value.
By: Cristina Velocci
November/December 2008 , Page 116
Thirteen years ago, Mexico’s economy was in a state of abject crisis: weak banking systems, the devaluation of the peso, a $50 billion bailout. ¡Ay caramba, how the mesas have turned! Today, by contrast, not only is Mexico enjoying a stable, growing economy, bolstered in part by a recent housing boom, but its little neighbor to the north is now getting to appreciate the unique satisfaction of being tethered to a crippled Second World economy.
Silly gringos!
Indeed, in times such as these, it’s only natural for a trader embroiled in the turmoil of the markets to get a sudden urge to run the hell away. And if you’ve considered fleeing — um, we mean, relocating — across the border, you’re hardly the only one: Over the past three years, investments in vacation homes in Mexico, primarily by buyers from the United States and Canada, have risen 60 percent.
It’s not hard to see why. There are the powdery beaches. There’s the fabulous weather. There’s enough tequila to repress the memory of your $147 million portfolio of mortgage-backed securities. There’s also the stabilization of the peso, new president Felipe Calderón’s U.S.-friendly government and recent legal changes allowing for foreign ownership of coastal land. “Mexico is weathering the financial crisis much better than the United States because there’s a lot of Mexican buying power in Mexico,” says Carlos Rosso, vice president of the Related Group.
That’s not to say that the country’s housing market has been completely immune; sales have slowed in recent months as a result of the U.S. economy being, well, you know…the U.S. economy. Still, Mexico remains one of the few places where the dollar continues to go a long way — and not just because its cost of living is 30 percent cheaper than that of the U.S. “Property tax in Mexico has never been a source of income for the country, so it’s very, very low,” says Alan Becker, developer of Nizuc.
At last, then, we might finally have found the silver lining of the tornado clouds of America’s current financial turmoil: If you must shelter your assets somewhere, well, these are some lovely shelters.
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