### Tijuana Registers Third Highest Housing Price Increase in Mexico
In the second quarter of 2024, the metropolitan area of Tijuana experienced a significant annual housing price increase of 13.1%, making it the third city in Mexico with the highest rate of housing cost escalation, only behind La Paz and Los Cabos in Baja California Sur.
Data from the Federal Mortgage Society (SHF) reveal that the rise in Tijuana’s housing prices is the largest since 2009. A similar trend is observed in Mexicali, which saw a 12.1% increase in housing costs, the second-highest rate since 2009, according to economic analyst Roberto Valero. Over the past six years, housing prices in Baja California have soared by 150%, with the average price of a house increasing from 766,889 pesos in 2018 to 1,916,894 pesos by the second quarter of 2024.
The primary factors contributing to this price surge include inflation, particularly in construction materials whose costs skyrocketed post-COVID-19 pandemic, and rising interest rates. Tijuana’s housing prices are even higher than those of other northern border regions, a phenomenon that isn’t entirely explained by the migration of workers from California to Tijuana. The demand for housing has decelerated due to longer wait times at border crossings.
Roberto Valero, President of the Center for Economic Studies in Baja California, argues that addressing the lack of affordable housing requires looking at the issue through the lens of urban development and wages. He cites that current salaries do not suffice for affordable housing, forcing residents to abandon their homes due to high transportation costs.
In Baja California, the default rate for Infonavit loans has risen by 4.7% over the past year, with a 123% increase in default rates from 2019 to 2024, despite efforts to convert loans and introduce more flexible payment plans.
The scarcity of affordable housing is stark, as Baja California has become the fifth state in Mexico with the least production of economical homes. From January to August 2024, only 335 affordable houses were built in Baja California. Six years ago, over 2,000 homes were constructed for low-income salary ranges. Of the 36,093 homes built in Baja California from 2018 to August 2024, 59% were horizontal developments, and 41% were vertical.
Ana Lizeth Gómez, Infonavit delegate for Baja California, indicates that reforms within the institution have increased the number of people eligible for mortgage loans. Nevertheless, producing enough affordable housing remains a challenge due to land scarcity in Tijuana.
The federal initiative proposed by President Andrés Manuel López Obrador aims to construct 57,000 houses in Baja California as part of a nationwide effort to build 500,000 homes. Construction is expected to start in February 2025, pending congressional approval and necessary adjustments by Infonavit.
Roberto Valero emphasizes that an effective approach involves not only developing better-paying jobs but also enhanced urban planning, ensuring job opportunities are created in closer proximity to affordable housing.
Alejandro Ortegón Puebla, president of the Tijuana Section of the Mexican Association of Real Estate Professionals (AMPI), stresses the need for government programs that incentivize developers to create affordable housing, thereby addressing the urgent demand.
**Secondary Article**
According to recent reports, Mexico’s housing market continues to witness widespread price increases driven by various economic factors. Like Tijuana, many cities across the country are grappling with elevated construction costs and inflation rates. In Monterrey, another major city, home prices have surged by nearly 11%, driven by increased demand and limited supply. Similarly, cities such as Guadalajara and Querétaro are also experiencing significant price hikes making affordability a growing concern.
Analysts predict that unless comprehensive urban development and economic policies are enacted, the housing crisis in Mexico could severely impact middle and lower-income families. The Mexican government is exploring various strategies, including public-private partnerships and increased funding for affordable housing projects to mitigate the escalating housing costs.
Despite these challenges, there is optimism among experts that thoughtful economic reforms and investment in infrastructure can stabilize the housing market, ensuring accessible housing for the diverse population.
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