La Paz, BCS - Welcome to our First Quarter 2019 newsletter. In this edition we report on two major athletic events recently held in La Paz, comment on paying taxes on rental properties and México's flourishing manufacturing industry, and give you a real estate market update from Los Cabos.
Two International Sports Events Took Place in La Paz During March
God provided athletes with a great climate for the 2019 Copa Pan Americana Triathlon La Paz on Saturday, March 23rd. Athletes competed under a clear blue sky and a temperature of 24°C. The Bay of La Paz offered favorable wind and tides for the swimming section which, by the way, was dominated by Mexican athletes.
Of the 1,500 competitors, 43 were in the "Elite" class. Participating athletes were from seven countries, Canada, Cuba, Japan, Lithuania, Syria, the United States, and of course, Mexico. Eighty athletes from our state of Baja California competed. Many of these athletes were able to improve their rankings in the International Triathlon Union, while running and bicycling under a full sun, and swimming under a nearly full moon.
The following weekend saw the next international athletic event held in March. It was an "Etape" of the Tour de France. More than 1,200 cyclists completed the course. They were attempting to qualify for the main event in France during the month of July. In addition to the cyclists, La Paz was invaded by a throng of international sports reporters.
2018 Los Cabos Real Estate Market Report
By Nick Fong, Broker of Los Cabos Agent
Last year was fantastic for the real estate market in Los Cabos with $360 million dollars of sales volume and 928 units sold. This number refers to houses, condominiums, lots, and other property types like fractionals, commercial, and multi-units. The average list price to sales price was 89 percent, that is to say, an 11 percent average negotiation room.
The sales volume for houses was $161 Million Dollars, and the number of units sold was 340 with an average sales price of $474,000 USD per house. The average days on the market was 359 days. The average list price to sales price was 90 percent.
Last, but not least, lots had a sales volume of 74 million dollars in 2018; 284 units sold, an average sales price of $263,000 USD per lot, and an average days on market of 528 days. The average list price to sales price was 82 percent.
For more information, you can download the reports HERE. Also, I am available to provide a more detailed report about any specific community in Los Cabos. 2019 is already looking to exceed 2018 numbers in Los Cabos' booming real estate market!
About the Author: Nick Fong is a licensed real estate broker from Chicago, Illinois. He has a degree in Real Estate Finance from the University of Illinois at Champaign-Urbana. Nick has been in Cabo since 2004 and is the broker/owner of Los Cabos Agent.
Interest on Paying Mexico Rental Property Taxes Growing
The Mexican Tax department (SAT), Mexican Immigration, and banks in the three NAFTA countries are all cooperating in an attempt to decrease tax evasion in this country. A prominent Los Cabos realtor wrote the following in the Gringo Gazette, a local English language newspaper:
"If you are renting your place you need to pay taxes on your income. Historically, SAT (our version of CRA and IRS) has looked the other way, but a few bad apples have spoiled it for everyone. Are making millions and making rentals a commercial enterprise... and reaping millions? SAT has started calling on Homeowners Associations and I believe it is only a matter of time before they take action." For more information, visit rentaltaxmexico.com, or email info(at)settlement-co.com
Mexico's Manufacturing Sector Flourishing
Earlier this year we took a 9-hour bus ride from Uruapan to Puebla in central Mexico. It had been a while since I was in that area of Mexico and I was amazed at the signs of prosperity. Urban growth, new plants, and tall buildings everywhere. The automotive manufacturing industry is the engine of the economy with aerospace flourishing in Queretaro.
Of course the economy is led by automobile manufacturing. Among vehicles being built are Nissan, Mazda, Honda, Infiniti and Volkswagen. The Luxury Maserati is produced in Puebla, Nissan has a mega factory in Aguascalientes, and the VW factory in Puebla is the largest that company has outside Germany.
Aerospace complexes can be found in the area. Bombardier, the Canadian company that started making snow mobiles in the 19th century, is now a world leader in the construction and engineering of planes and trains.
In addition to the production of commercial and private jet planes, Bombardier designed and built the equipment and cars for the Metro system in Mexico City and the cars for its light rapid transit system. So the combination of automobile manufacturing and the aerospace industry has provided prosperity.
While in Puebla, we took a side trip to Cholula to see the pyramid. The Great Pyramid of Cholula, also known as Tlachihualtepetl (Nahuatl for "made-by-hand mountain"), is a huge complex located in Cholula, Puebla, Mexico. It is the largest archaeological site of a temple in the New World, as well as the largest pyramid known to exist in the world today. The pyramid stands 55 meters (180 ft) above the surrounding plain, and in its final form it measured 450 by 450 meters (1,480 by 1,480 ft).
The Great Pyramid of Cholula is a temple that traditionally has been viewed as having been dedicated to the god Quetzalcoatl. The architectural style of the building is linked closely to that of Teotihuacanin in the Valley of Mexico, although influence from the Gulf Coast also is evident. The structure is so old that it had been covered in grass ad vegetation by the time the Spanish arrived.
Mexico Moves into Fourth Place in Automobile Exports
The value of vehicle exports was up 19% last year. Mexico overtook the United Kingdom and Canada to become the fourth biggest automobile exporter by value in the world in 2018. The value of Mexican-made vehicle exports increased by 19%, compared to 2017, to reach just over US $49.4 billion, according to the World Trade Organization (WTO). Just under 3.5 million vehicles were shipped abroad from Mexico, a 6% increase on 2017 numbers. The top ten exporters in order of ranking are: Germany, Japan, USA, Mexico, United Kingdom, Canada, South Korea, Spain, Belgium and France.
AREA: A Real Estate Referral Network
Associated Realty of The Americas is a small group of successful and high-profile REALTORS® across North America, Europe, South America and Asia.
In addition to monthly Conference calls, the group meets at the two major NAR events, the REALTORS® Legislative Meetings and Trade Expo, held each May in Washington DC, and the REALTORS® Conference and Expo, held in various locations each November, and has a Retreat each year. The retreats rotate from Eastern to Western cities. This year, it will be held in Boise, Idaho. Representing Mexico in AREA are John Glaab (Uruapan, Mich/La Paz, B.C.S.), Linda Neil (Uruapan, Mich/La Paz B.C.S.), and Jay West from Cabo San Lucas. For more information, email John.Glaab(at)settlement-co.com.
John Glaab is Director, International Marketing at The Settlement Company, Mexico's oldest title and escrow company. A Certified International Property Specialist, he is a founding member of AMPI Los Cabos and the new Global Mexico Real Estate Institute. In 2012, John was named the International Real Estate Member of the Year by NAR. For further information, contact John at John.Glaab(at)settlement-co.com.