Germán Ahumada, president of the company, is optimistic about the future of the sector and announced that they have enough land reserves to develop more than 124,200 houses in the coming years.
Despite the effects of the health crisis, the housing developer Consorcio ARA continues to advance with the development of eight projects located in the states of Puebla, Quintana Roo, Jalisco, and the State of Mexico, said Germán Ahumada, president, and CEO of the company.
“We are particularly thinking of opening eight housing developments this year. In the State of Mexico, we have three, one that has already started, and the other two are in the licensing process, ”he said.
The president of Consorcio Ara said he is “optimistic” about the future of the housing sector in Mexico since they have maintained land reserves to build, in the future, around 124,244 houses in 16 states of the Mexican Republic.
“If we saw that these developments could not work, obviously we would not build them right now,” Ahumada declared when participating in Grupo Financiero Banorte’s Norte Economico podcast.
According to its latest financial report, the value of the land reserve was 4,440.8 million pesos at the end of 2020 and consists of 32.0 million square meters (m2). Of this total, 2.2 million m2 will be allocated to real estate projects such as shopping malls, tourist centers and industrial zones.
The housing sector suffered the impact of the health crisis due to the coronavirus and the zero economic growth, recalled Germán Ahumada, who referred data from INEGI that revealed that the drop in construction activity was 17% and that of building of 16.5% in all of 2020.
“At first it did hit us a lot (the pandemic) because we had to close half the month of March, all of April and May; until we were given the opportunity because it was an essential activity, we were able to resume operations in June. But it took a lot of work, ” said the realtor expert.
Then he commented that the activity of the housing sector in the northern region and the Bajío of Mexico was not as affected as it was the south that suffered a sharp fall and the center where the activity remained practically stable. Although in tourist areas the greatest impact was seen and housing development is just beginning to reactivate.
In this environment “you have to adapt,” he said after stating that the health crisis and new forms of remote work have meant that “new housing designs must have a place for teleworking.”
Consorcio Ara is a company listed on the Mexican Stock Exchange. The price of its shares has had gains in 2021, accumulating a yield of almost 13%, at 4.31 pesos from the 3.82 at the beginning of the year.
Germán Ahumada also mentioned that, in this crisis due to the pandemic, unlike others such as that of 2008, the housing sector has had the support of banks and institutions such as Infonavit and Fovissste.
“In another crisis, loans were closed and everything got complicated, now I think things are more or less normalizing,” he emphasized.
Regarding the prospects for this business, he considered that there is potential, since Mexico has an interesting demographic bonus. According to data from the National Institute of Statistics and Geography (INEGI), in the last decade around 13 million new Mexicans were born, which ensures that the demand for housing in Mexico will continue.
Additionally, with the economic recovery and the generation of new jobs, the sale of new and used housing will be reactivated.
Another catalyst to increase home sales are the new products that are emerging, for example, there is currently a proposal so that the Infonavit housing subaccount can be used as a down payment and complete the house payment with a bank loan.
In 2020, with the health crisis at its peak, Ara generated revenues of 5,459.8 million pesos, a figure that was 28.9% lower than that reported in 2019. While the units sold amounted to 6,520, which meant a decrease of 34.8 % in the comparison period, with an average price of 805 thousand 800 pesos, showing an increase of 8.7 percent.
Source: Real Estate Market MX