The average price of a home today in this border city has reached five million pesos
Tijuana – The price per square meter of land today is constantly increasing in this rapidly growing city for one simple reason; “Tijuana is reaching its geographical limits and vacant land is scarce, a driving force behind the skyrocketing prices of homes for sale,” said Jaime Ponce, director of commercial real estate sales for Frasa, a local developer.
Currently, the price for any remaining land on the outskirts of the city is “between 70 and 100 dollars per square meter compared to 400 to 800 dollars per square meter in Tijuana’s urban areas”, he explained.
“Our team works hard to find a piece of land in a good location that can be developed for either commercial or residential use, but the cost of land today is often so expensive that it makes any well executed projects simply not viable.” Ponce commented.
He pointed out that the city’s land reserve available to build any real estate infrastructure are very limited, which in turn generates “very small houses” with prices “through the roof.”
He added that up until recently, “only a few local real estate developers were focusing on the construction of affordable housing units to meet the demand caused by so many unable to buy a home today in Tijuana, due to the high prices. That market is being served by almost no one,” said Ponce.
80,000 workers in Tijuana unable to buy a home today
“Approximately 80,000 workers today in Tijuana are unable to purchase their own home because the maximum home loans offered by INFONAVIT (Institute of the National Workers’ Housing Fund) is simply insufficient,” said Fermín Kim King, president of the Association of Real Estate Professionals of Tijuana (APIT).
The current maximum home loan offered by INFONAVIT is 500 thousand pesos (approximately 25 thousand dollars) and “it is impossible to build a house today for that amount”, observed the APIT president during a press conference to promote “Real Estate Week 2022”.
Engineer Manuel Trigo, managing partner of a local real estate company, pointed out that “the current federal administration suspended any increases to the home loan subsidies for the last three years, which effectively stopped their sale, and mainly affected workers earning at or near minimum wage.
The effect has increased the demand for rentals in Tijuana even further, a market already stretched thin from a growing Expat community of cross border workers seeking to escape the high rents in San Diego.
Trigo pointed out that “those workers currently earning less than five times the minimum wage cannot afford to buy a home or condominium in Tijuana today and affordable rentals are increasingly hard to find.”
Pivoting to meet demand
Jaime Ponce shared that “Frasa is now redirecting its efforts to develop more affordable properties, currently building homes in the range of 1.9 to 2.2 million pesos” (95 to 110 thousand dollars),”when four years ago, homes prices of 700 thousand pesos were still being marketed.”
“It’s a diverse market and the average cost of a home or condominium in the city today is five million pesos” (250 thousand dollars), although he pointed out that “there are many homes today on the market in Tijuana between 10 and 20 million” (500 thousand to one million dollars), the commercial real estate director added.
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