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Second Chance in the Playa del Carmen Real Estate Market

Thomas Lloyd

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The Playa del Carmen real estate market has had some of the world’s most interesting growth rates and fascinating samples of regional trends. During the 1990’s the little village was known as the pier town where you grabbed the ferry to get to Cozumel.

It was not the destination, but more the community on the road towards the destination. This soon changed though, people began to notice its beaches and the community. European backpackers began frequenting the area and the 5th avenue began to make a name for itself. Hotels and investors began to notice quite quickly the potential of the area. Hotel room inventories grew from 10,000 units up to 15,000 - 20,000. Today, the Riviera Maya hotels have more rooms than Cancun. With the tremendous growth in various Playa del Carmen industries, the populaton boom began and the real estate market began taking off.

Playa del Carmen over the past five years, has been some of Mexico’s strongest appreciation markets with returns in the double digits. Many investors would purchase Mexico pre construction condo units and sell them 8 or 12 months later with 30% or more appreciation. It was a boom all over the coast being witnessed during the first years of the 2000 decade. In the middle of this decade, the comments I should have bought that property 2 years ago were quite common. These observations from the buying market in 2006-2008 were also accompanied by a decline on the appreciation rates. Each year, as the price per square meter crept upwards, the rate of appreciation began losing some steam.

2008 and summer of 2009 brought a unique occurence to this regional marketplace. The world economic recession has brought its effects onto the Playa del Carmen real estate market and in the Mexico real estate industry. The appreciation rates have flattened and have begun to drop. Large amounts? NO, but very interesting amounts. Some people see this as a half empty glass of water but the current scenario does bring about some fantastic opportunities for the smart investor. In fact, there are some quite interesting investment alternatives that could be reviewed as an even healthier market for investment purposes than than the investment environment originally witnessed during the beginning of the years 2000. Let me explain.

At the beginning of the Great Appreciation Boom of Playa del Carmen, there were still many risks in the market, there was the risk of new developers, risk of the reaction of the buying market, risk of unknown area development. Today, investors have first hand, regional history data. The market absorption and projections are based more on history facts rather than the guessing game or correlating future results based on similar marketplaces in other regions. Risks within investments, if purchasing finished products, have been reduced by the knowledge of purchasing a finished product versus the unknown results investing within a new construction. Reduction of risks by knowing which neighborhoods were successfully developed and which neighborhoods have not been accepted by the buyers. Also, the investor is able to measure how continuous of a demand the Playa del Carmen has reacted over several years of construction and absorption cycles. These first hand facts give you and your consultant better data to manage your investments and increase your probabilities of strong returns.

The probabilities of continued long term growth are strong in favor of the real estate investor when purchasing properties in the region of Playa del Carmen. Obviously there is a short term downturn. But that is what this entire article is discussing. This summer of 2009 is presenting some incredible and unique real estate opportunities that are not common and which allows many people the Second Chance to buy into the market and ride the wave of appreciation. Contact us here at Lloyd’s Real Estate to learn more on how to buy real estate in Mexico and how to apply some strategies when acquiring land in Mexico.


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