Buying a house is nearly impossible for millennials

Housing prices have more than doubled in Mexico City in the last few years and young people can't afford it
Buying a house is nearly impossible for millennials
Average housing prices from ten years ago were of one million and a half pesos; today, they have grown to four million - Photo: File photo/EL UNIVERSAL
22/06/2018
13:38
Newsroom
Mexico City
Laura Quintero
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Young people’s working conditions in Mexico make it harder and harder for them to buy real estate products. More so in Mexico City, since real estate prices in the country’s capital have more than doubled, according to Homero Garza Terán, head of the Federal Mortgage Society (SHF).

“It is highly unlikely for young people to live in the same neighborhoods as their parents, because they simply can’t afford it. The only way for them to do so is to move in with their parents and bring in their spouses because real estate prices have become unaffordable,” he stated at the Expectations forum of the real estate industry facing the electoral process of 2018.

He explained that housing prices in the city have increased at a rate of 7% and 8% annually. In five years, should this tendency continue, housing prices will have increased 40%.

According to Softec real estate consulting, average housing prices from ten years ago were of one million and a half pesos; today, they have grown to four million, whereas in Monterrey and Guadalajara, prices have remained at a stable price of 700,000 and 900,000 on average.

The Young People and Job Markets report, conducted by the Salary Observatory at the Ibero-American University of Mexico, informs that 66.5% of young people between 15 and 29 years of age who are part of the working population in Mexico, currently find themselves in a precarious situation in terms of employment and 58% of them don’t even have a formal contract.

The lack of decent wages and social security benefits account for two thirds of that precariousness. The other 33% is due to a lack of job security and benefits, as well as excessive working hours.

Jordan Magulen, executive manager of Nomad Living, stated that, in addition to low wages, many young people receive their income through fee contracts and freelance jobs with unquoted payments.

Given the scarce opportunities for house purchasing, there has been a rising demand for rentals, but they have also proven to be too expensive for young people, which is why millennials have had to come up with other ways of having a home, Magulen stated.

Most of these young people live with roommates, and there have been some co-living projects, which consist of a group of people deciding to share housing.

Specialists have highlighted that high land prices are the main problem, and the only plausible solution would be to increase the density of housing areas, which would imply a thorough modification of land use permits.

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