Mexico’s housing market is showing small signs of improvement, with the nationwide house price index (inflation-adjusted) rising by a modest 2.2% in 2022 from a year earlier, following year-on-year growth of 1.5% in 2021 and 1.8% in 2020. However, in nominal terms, (excluding inflation), house prices actually increased 10.4% last year.

For over a decade the housing market in Mexico has hardly moved. In 2009, house prices rose 0.8% (inflation-adjusted), in 2010 they fell 0.6%, in 2011 +2.4%, in 2012 -1.2%, in 2013 +0.4%, and in 2014 and 2015 by +0.8%.

The housing market then improved gradually in the pre-pandemic years, with real house prices rising by an annual average of 2.8% from 2016 to 2019.

This means that property prices in Mexico, when adjusted for inflation, have only increased by 22% over the past 14 years, which is exactly inline with the country’s GDP growth of 22% between 2009 and 2022.

However, the Mexican economy is expected to continue to struggle and expand by just 1.7% this year and by another 1.8% in 2024, according to the International Monetary Fund (IMF).

In February 2023, the central bank Banco de Mexico (Banxico) raised its key interest rate by 50 basis points to 11%, its 14th consecutive rate hike and adding to the cumulative 700 basis points rate increase introduced since the start of the bank’s tightening cycle in June 2021.