Mexico was struck by three earthquakes in the month of September, with the 7.1 magnitude earthquake that struck Mexico City on September 19 causing widespread damage to municipal infrastructure, in addition to over two hundred deaths. The capital is home to 27% of the country’s population and generates 17% of its national gross domestic product. As the city implements reconstruction plans, Pablo Soria de Lachica points to improved building codes since the 1980s as a key factor in the reduced number of casualties relative to the capital’s infamous 1985 quake, in which 10,000 people lost their lives.
According to the LA Times, city officials reported the earthquake affected 7,649 properties, of which 321 buildings are now considered uninhabitable. Shortly after the disaster, the city announced a 3 billion pesos reconstruction plan, making financial aid and loans available to residents commensurate with degrees of damage. The destruction of property caused demand for housing in neighborhoods surrounding affected areas to rise by 50%. In contrast, the value of buildings in damaged quarters declined significantly. Although the impact of the earthquake will alter short term supply and demand in the regional housing sector, market fundamentals will drive longer term growth, according to Pablo Soria de Lachica.
Before the earthquake, demand outpaced supply for housing in the capital. Nasdaq reports that of the 46,000 homes under construction this year, only 20,000 are expect ed to be completed by 2019. In contrast, up to 120,000 buyers seek homes per year in the region. For the first half of 2017, the Financial Times reported that house prices in Mexico City rose 7.6% year-on-year on favorable supply and demand trends. Policy decisions have contributed to this imbalance, with zoning laws restricting home construction in suburbs around the capital. Even as the disaster slows residential construction in the city, some new spending will be driven by renovations as property owners rehabilitate and reinforce older buildings.
The outlook for Mexico City’s economy remains positive due to several trends. The region is the main hub of economic activity in the country, receiving significant financial support from the national government to facilitate commerce. It is a magnet for international property developers, who have invested hundreds of millions of dollars in residential and hotel development projects. Finally, tourism continues to boom, attracting not only American and European visitors, but also an increasing number of tourists from other regions in Mexico.
Pablo Soria de Lachica is an expert broker in foreign exchange transactions, offering a unique perspective as well as professional guidance to clients in international trading. He is also a lead collaborator with Kartoshka, a marketing firm at the forefront of the latest technologies in sales, telemarketing, and customer support. Soria de Lachica received a Masters of Business Administration from the Universidad Tecnológico de México (UNITEC). He is an avid supporter of community projects with an environmental focus, and a contributor to organizations such as America-Israel Cultural Foundation and the Jewish Federation of Greater Phoenix.
Pablo soria – Professional Profile – LinkedIn: https://mx.linkedin.com/in/pablosoriadelachica
Pablo Soria de Lachica Discusses Ways to Move from the Domestic Market to the Forex Market: https://finance.yahoo.com/news/pablo-soria-lachica-discusses-ways-160400994.html