Home prices in major urban centers across Mexico have increased at a rapid pace over the past five years, with Mexico City seeing a staggering 50% jump.
Point2homes, which conducted the study, says housing prices increased between 30% and 50% in 31 Mexican cities it surveyed.
Zapopan and Durango experienced an increase of 43%. The only Mexican city that showed little increase in housing prices is Cancun, which saw 30% increase in home prices.
A buyer should afford a home if its value is three times his annual income. Considering the current prices, a large majority of people will find themselves unaffordable.
Per capita incomes are also growing but they are no match for home price growth, says the report. In Mexico City, the report added, housing prices doubled over the past 10 years.
However, Mexico City is the only large real estate market in Mexico to undergo such a dramatic change, because most other cities experienced a more moderate home price growth.
There are many factors stoking the home prices, restrictive land use and zoning policies being the major ones.
Some cities simply have no space to expand. Home prices shoot up as such cities try to accommodate more people.
Since Mexico City is densely populated, its housing prices are less likely to fall in the near future.