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Real Estate: Cross-border Finance Explodes

Mexico's real estate sector, already benefiting from a mortgage and tourism boom, gets a push from U.S. cross-border financing.


Thanks to new strong demand and new regulations, available mortgage financing from U.S. lendors in Mexico will reach $400 million this year. That's four times the amount last year, says Rogerio Basso, a Miami-based Latin America specialist for Ernst & Young’s hospitality and real estate advisory service.

"As there has been continued stability in the economy as well as the currency, the risk in Mexico has been declining," he says.  "So the spread between country risk in Mexico and the United States has been declining, which represents an interesting opportunity for U.S. investors."

However, although U.S. real estate lending to Mexico has increased, it is still not the driving force behind the residential real estate boom in the country, says Peter Oxman, a Houston-based real estate partner at King & Spalding, a law firm that has represented  American and foreign institutional investors and developers in several major real estate transactions in Mexico.

Basso agrees. Last year, Mexican investors funded...

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