3 Trends That Will Shape Real Estate in Puerto Vallarta in 2017

by Applegate Realtors on Jan 11th, 2017 under Blog - Puerto Vallarta

Before buying property in any location, it’s important to understand what drives the real estate market. Having the right information will make you a smart and successful investor.

Puerto Vallarta’s real estate market is vibrant and has been on the radar of buyers from the US and Canada for more than 50 years. Indicators show that this year, real estate transactions in the Banderas Bay will increase. Below, we outline the top three trends that will have an impact on the real estate market in Puerto Vallarta in 2017.

Trend #1: The value of the Mexican peso continues to fall

The devaluation of the Mexican peso and the Canadian dollar over the past few years presents a challenge for buyers from these respective countries. Property value in Puerto Vallarta is based on the more stable US dollar and a weaker currency means rising prices for buyers from Mexico and Canada.

Although the Canadian dollar has remained fairly stable over the past year, in the past five years, its value has decreased 30% against the US Dollar. The Mexican peso has decreased in value from 17.09 in December 2015 to 20.52 in December 2016 against the US dollar. If we look at the strength of the Mexican peso five years ago, it has decreased in value by a whopping 49%.*

Although it may seem like only one set of individuals is benefiting, there is some good news for everyone. Property owners of Canadian or Mexican origin will benefit from this situation if they are interested in selling.Buyers from the US benefit because their currency has remained more stable. In terms of construction, their money will go further, because materials and labor costs are managed in pesos.

The strength of the US dollar provides benefits for everyone, depending on their situation. The current trend of the realty market in Puerto Vallarta is that this year is ideal for individuals from the US to buy and is the right time for Mexican property owners from Canada and Mexico to sell.

Trend #2: Real estate sales in Puerto Vallarta keep increasing

According to the Sold Market Analysis report by MLS Vallarta on January 06, 2017, real estate agencies across Puerto Vallarta are selling more properties. In 2016, condo sales increased by 24% while housing sales jumped 71%, compared to 2015 sales.

Additionally, an increase in visitors arriving in Puerto Vallarta is impacting the hotel and rental market. The Puerto Vallarta Tourism Board reported that for the months of January through November of 2016, tourism volume increased 19% in Puerto Vallarta compared to the previous year. Arrivals into the Puerto Vallarta International Airport increased by 12.3% for the same months. The constant influx of tourists arriving in Puerto Vallarta indicates a growth in demand for vacation rentals, which may also have an impact on home and condo sales as investors become more interested in maximizing real estate potential in the region.

The recent changes in US politics have left many with doubts as to how markets in Mexico will be affected. It’s safe to say that a Donald Trump presidency creates uncertainty. However, one thing that is certain is that tourism continues to grow worldwide. Additionally, there are many people from the US who are considering purchasing real estate outside of the country. The most feasible destinations for these individuals is Canada or Mexico. Therefore, we can speculate that regardless of the new US president-elect, the demand for real estate in Mexico will only continue to increase.

Trend #3: Vacation rental websites are strengthening property value

Puerto Vallarta has a very large short-term rental market. For this reason, vacation rental websites, such as Airbnb and VRBO, that allow property owners from around the world to capitalize on unused real estate are significantly increasing the value of properties in the region.

These services are changing the way people look at property ownership, and therefore, changing the residential real estate market. Property ownership is now, more than ever, seen as an investment opportunity. Those wishing to own a vacation home in Puerto Vallarta can choose to rent their property when not in the country, until they decide to relocate full-time to Mexico.

Partner with someone you can trust

Do you still have questions about how these trends will impact the Puerto Vallarta real estate market in 2017 and in subsequent years? Our real estate advisors are experts in growth and development trends as well as investment opportunities in the Banderas Bay region. To learn more, contact us online or via our toll-free number 1 (866) 519 4342 when calling from the US or Canada. You can also call us within Mexico via our toll-free number (01 800) 830 7879 or our local number 322 221 5434.

Note*: Current and historical exchange rates were found using www.xe.com