Puerto Vallarta Lifestyles Magazine   Order by Amex   Order by Check   Articles   Profiles   Search

A Ten Year Retrospective of Puerto Vallarta Real Estate by Marla Hoover    summer-fall/99 Statistics from Multi-List Vallarta The last decade of the millennium has brought a multitude of changes to the real estate market of Puerto Vallarta. The effects of this can be seen by the expansion of the market itself beyond the confines of the Bay of Banderas. New phrases have been coined to describe the growing residential areas. It is no longer referred to as just Puerto Vallarta, but rather as Costa Vallarta, which defines the region between Cabo Corientes and San Francisco, Nayarit. Vacation condos have been joined by luxury dream homes. New laws and international agreements have made purchasing properties easier than ever before. Up markets and down markets have been weathered and industry professionals have established an association of conformity to keep up with the demands of an expanding marketplace. Major Influences of Change An important change has been the acceptance of the Mexican real estate trust system. Ten years ago it was not only difficult for realtors to explain the trust system for the acquisition of Mexican land rights to foreigners, it was difficult for foreigners to accept it. Today the trust is understood and more readily accepted. This trust system, or Fideicomiso, was implemented in 1973 by the Mexican government and established a way in which foreigners could get the equivalent of an actual title. The law was codified in December of 1993 providing foreigners with the ability to acquire residential real estate through a bank trust. It requires any one of the privately held Mexican banks to act as trustee. The bank holds title to the property, in trust, to which the purchasers are the beneficiary. They have all the rights of ownership to the property and may sell, lease, mortgage, improve, and pass as inheritance, just as with a regular title. This new Foreign Investment Law and the North American Fair Trade Agreement, NAFTA, in 1992, institutionalized how business is done between Mexico, the United States and Canada, and gave real estate purchasers investment protection and reduced distortions within the industry. According to Silvia Elías, of PV Realty and President of AMPI, Mexico's association of professional realtors, the NAFTA agreement "was the major reason for the real estate boom in the coastal areas of Mexico. It gave security to buying real estate in Mexico. This, as well as the modernization of Mexican laws pertaining to the conversion of ejido-agrarian land to private status for investment, has increased real estate opportunities tremendously." The agrarian law of 1992 opened up ejido beach and farmlands for foreign development. This is significant because approximately 50% of the entire land area of Mexico are ejido-agrarian lands and sale/purchase of these properties is banned. Converting ejido land for private use at one time required a presidential decree; but it is now within the jurisdiction of local municipal governments. With the advent of increased property available for foreign investments, including rights to and deeds for, came long-term financing and title insurance. These American services enabled the real estate market to gain the faith of an ever-increasing North American market. Brock Squire of Brock Squire y Asociados states, "There was no financing 10 years ago, it was all cash or the vendor would take back short-term loans of two to three years." Inland Mortgage started making loans here after three years of research and due diligence, allowing for US residents to borrow US funds with Mexican property as collateral. These special programs are designed for Mexican property purchase with FHA underwriting standards, with long term fixed interest rates of 9%-10%, plus points. "These factors along with a good US and Canadian economies have kept the market strong and have added to its forward growth. Click here to continue...

Back | Top of Page | Home | Free Newsletter | Search | Help | Tell a Friend

m3 © Producciones ViVa