Affordable Housing Vanishes in Mexico City: A Mere 2% of Sales in 2024

Finding affordable housing in Mexico City has become nearly impossible for many residents. The construction of such homes has significantly declined.

According to a study by 4S Real Estate, only 2% of the 3,665 units sold in the second quarter of 2024 were in the economic segment, priced up to 600,000 pesos ($30,000).

Meanwhile, residential units priced between 2 million pesos ($100,000) and 4 million pesos ($200,000) have gained traction. These accounted for nearly 50% of sales this year, up from 38% in the second quarter of 2023.

Marisol Becerra, a regional partner at 4S Real Estate, noted that around 1,500 real estate projects are currently available in Mexico’s capital. However, the more affordable segments are increasingly scarce.

“It’s dramatic that social and economic housing is practically nonexistent when average family incomes are around 16,000 pesos monthly. Last year, only 164 such units were sold. It’s a tragedy and a reality,” Becerra stated.

The decline in affordable housing availability stems from challenges faced by developers in recent years. These include the COVID-19 pandemic, halted construction permits, and rising interest rates.

Nonetheless, Becerra believes the sector has hit rock bottom and expects improvement in the coming years: “We’ve reached the lowest point of the cycle and are beginning to see slight recovery; despite the significant drop, demand remains.”

State of Mexico as an Alternative

The shortage of affordable housing in Mexico City has led some people to relocate to other areas, such as the State of Mexico, where more affordable homes are available.

Data from 4S Real Estate shows that last year, 17,819 homes were sold in this region. Of these, 8,000 were social interest homes; the rest were divided among middle-class, residential, and residential plus segments.

Becerra highlighted employment as the main driver of housing demand. Some areas in the state may benefit from developments like the Felipe Ángeles International Airport (AIFA) and increased industrial growth nearby.

“AIFA has significantly boosted the area’s dynamism. The Zumpango corridor has become an attractive hub that real estate developers are now considering as an opportunity,” Becerra added.