Housing in the state continues to show significant price inequalities; while homes for sale are being offered for up to 53 million pesos on average and rents reach 85 thousand pesos per month, most families do not have enough income to purchase properties valued at one million pesos, according to the recent “Economic Analysis Bulletin” from ITESO.
The real estate market in Jalisco continues widening the gap between a small luxury segment and the majority of families who do not have sufficient income to buy or rent a home, according to the latest edition of the Economic Analysis Bulletin from the ITESO School of Business (ENI), in its recent Housing Special Report.
The clearest example is Zapopan, which, despite ranking 16th among Mexican cities with the highest home sale prices, has the four most expensive neighborhoods in the entire country. Ayamonte, Villa Magna, Zotogrande, and Residencial Los Frailes (in that order) have average property prices ranging from 44 to 53 million pesos.
In addition, three of the ten neighborhoods with the highest rental prices in Mexico are located in Zapopan. High-income tenants in Puerta Las Lomas (third place), Puerta del Bosque (fifth place), and Puerta Plata (seventh place) pay between 78 thousand and 85,600 pesos per month in rent.
In contrast, Mexican and Jalisco families face increasing difficulties accessing housing, as they encounter sale and rental prices that are up to ten times higher than their incomes.
On average, a Mexican household’s current income is 21,355 pesos per month. To pay a mortgage that would allow them to purchase a one-million-peso home, a family would need an income of 30,699 pesos per month, according to a simulation presented in the bulletin. The calculation considers a 20 percent down payment, a 20-year term, a fixed annual interest rate of 11.08 percent, an annual total cost (CAT) of 13.4 percent, and the criterion that mortgage payments should not exceed 30 percent of household income.
The situation becomes more difficult if the property value reaches 4.27 million pesos (the median home price in Mexico), since families would need monthly incomes of around 131 thousand pesos—six times higher—to afford the mortgage without sacrificing other basic expenses such as food.
If a mortgage is required for a home valued at 6.8 million pesos (the average housing price in Mexico), the necessary income rises to 208,700 pesos per month, almost ten times more than what a family with low or medium income levels earns.
These gaps highlighted by the bulletin show that a large portion of the residential housing supply is beyond the reach of most of the population. Therefore, the ENI report calls for the implementation of public policies that improve housing accessibility, arguing that housing should not be left solely to market forces.
“Decisions about where to live and where to build go beyond individual property owners and influence urban mobility, infrastructure provision, demand for public services, commuting times, productivity, and environmental sustainability in cities. Therefore, it can hardly be considered a market whose dynamics should depend exclusively on individual supply and demand decisions,” said Mireya Pasillas Torres, ENI academic and editorial coordinator of the bulletin.
The increase in real estate prices is pushing rental costs upward, making housing alternatives more difficult for middle- and lower-income groups. Jalisco ranks sixth nationwide with the highest average rental costs (29,432 pesos per month) and fourth in the country for the most expensive homes for sale (8.17 million pesos on average).
Both figures exceed the national average. The average monthly rent in Mexico is 27,273 pesos, while the average home price is around 6.8 million pesos.
These and other figures from the Housing Special Report come from a large-scale review of prices on digital real estate platforms. Researchers reviewed and validated the costs of nearly 750,000 properties across the country.
Toward regulated real estate development
The current housing market costs in Jalisco and Mexico will only change once a long-term urban policy is adopted to regulate real estate speculation instead of leaving everything entirely to the market, according to Ignacio Ponce de León, coordinator of the Sustainable Real Estate Development Degree Program at ITESO.
“As long as everything remains controlled by public demand, developers have the ability to set the prices they consider appropriate, and if people continue buying, the situation will continue,” he explained. “The key issue is the lack of regulation by municipal governments, which must establish limits on how far real estate developers can go regarding land costs and rental prices, and create control mechanisms.”
Ponce de León cited cities such as Berlin, Germany, where limits have been established regarding urban development zoning, land use, and how many floors buildings can grow vertically.
According to the academic, authorities must work together with the real estate sector to define where and how urban growth should occur. “By reducing gentrification and protecting cultural identities, the government becomes a participant in development alongside companies, allowing rental costs to be regulated,” he stated.
A new urban policy could also focus on developing medium-sized cities or promoting more accessible mortgage financing mechanisms for families, since current credit systems mainly benefit those who use housing as a speculative investment or rental business.
These measures could also help slow uncontrolled urban expansion toward peripheral areas, where populations are displaced by high rents and forced to live in “more affordable homes, but with greater difficulty accessing services and infrastructure,” added Ponce de León.
The ITESO Economic Analysis Bulletin agrees that housing should no longer be viewed only as a market dependent on supply and demand. However, it emphasizes that the solution does not involve imposing strict price controls on sales and rentals, as international experience shows that these measures can produce unintended effects, such as reduced private investment or deterioration of housing stock.
The document emphasizes the importance of long-term urban planning that does not depend on isolated decisions made by real estate companies and that encourages housing development in central areas with guaranteed infrastructure, mobility, and public services, among other proposals. The 38th edition of the Economic Analysis Bulletin can be downloaded at: https://ite.so/boleconomi38.
Source: iteso
