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Reuters
MEXICO CITY
Mexico City's deadly earthquake last month reminded home buyers of the vulnerability of a city built on a soft lake bed, but even so, shortages of properties in desirable areas could keep the housing market steady.
In areas most affected by the quake, where safer, recently built properties are in relatively scant supply, property experts said home prices could actually climb in the short term.
In the trendy Condesa and Roma neighborhoods where dozens of older buildings suffered structural damage and several collapsed completely, values are likely to stay flat, analysts said. The 7.1 magnitude earthquake on Sept. 19 killed 369 people in all and struck the capital particularly hard, toppling 40 buildings and severely damaging as many as a thousand properties.
"A great quantity of people, we still don't know how many, lost their homes and will suddenly arrive like a great block of buyers for what's in the construction process.
"You can expect prices to rise,"said Eugene Towle, managing partner at real estate consulting firm Softec.
Modern Mexico City was built over the island Aztec capital of Tenochtitlan, with much of the contemporary capital sprawling over the bed of a giant lake. Areas on the spongy bed feel earthquakes more strongly than neighborhoods built on rock. There has been growing demand for housing in the last three years, largely because officials enacted new zoning laws to restrict construction of multifamily buildings in suburbs, squeezing up housing prices in the city center.
Roughly 46,000 homes are under construction in the Mexico City region, according to Softec, with 20,000 to be completed in the next two years.
Demand far outpaces production, with 70,000 to 120,000 buyers seeking homes every year.
Prices rose 2.8 percent last year, while rents jumped 12.4 percent on average in the Cuauhtemoc district where Condesa and Roma are located, according to Inmuebles24, one of Mexico's leading real estate websites.
