With an expanding economy and population, San Luis Potosí was ranked among the top-five Mexican cities for real estate investment in 2019 by online real estate marketplace Lamundi.com.mx and Mexican property consultant Gava Capital. While the prospects for the real estate industry in San Luis Potosí are bright, there is undoubtedly potential for growth in the sector. According to data from the National Chamber for the Development Industry and Promotion of Housing (Cámara Nacional de la Industria de Desarrollo y Promoción de Vivienda, CANADEVI), the number of social houses that were constructed in San Luis Potosí declined from 3082 in 2015 to 1276 in 2017. This figure more than doubled to 2813 in 2018, but represented just 1.3% of total social housing units constructed throughout the country that year.
Quality of Housing
According to the National Institute of Statistics and Geography, in 2015 some 72% of the 710,000 homes in the state of San Luis Potosí had running water, 97.4% had electricity and 71% were connected to the public sewerage system. The housing deficit across the state has widened due to the increase in population and is projected to reach 30,000 homes by 2021, Janeth López Hernández, director-general of the State Housing Institute of San Luis Potosí (Instituto de Vivienda del Estado de San Luis Potosí, INVIES), told OBG. To help fill this gap, INVIES built 5000 new homes in the state’s flagship housing project, Satellite City.
While land costs in San Luis Potosí remain low compared to other states, in March 2019 industry players noted that overall prices in the first two months of the year increased by 10-15% on the same period of 2018. The higher costs were driven by a year-on-year price increase of 65-68% for asphalt, 27% for steel and 18% for cement. According to Manuel Castanedo de Alba, president of the National Construction Industry Chamber, in San Luis Potosí the sector closed 2018 at a loss, as local companies were outpriced by external competitors for public projects. In 2018 Mexico City-based real estate investment firm Thor Urbana began developing The Park, a mixed-use complex on a 120,000-sq-metre plot of land adjacent to the city’s convention centre. Set to open in 2021, the project is estimated to cost MXN8bn ($413.7m), and create 2600 jobs directly and another 5600 indirectly. According to CANADEVI data, in 2018 the construction sector employed 9881 construction workers and 3169 people working in related capacities.
A number of subsidies underpin the sector, largely through credit-based systems. The National Workers’ Housing Fund Institute allows land to be bought for the development of sanctioned housing units under its supervision through a scheme called Línea III, and housing is subsidised by the federal government. However, CANADEVI data shows that state financing in the housing sector has declined, from MXN120.4m ($6.2m) for new housing subsidies in 2015 to MXN6m ($310,000) in 2018.
One area of continued growth is Satellite City, which lies south-east of the state capital. Within a 15-km radius of the complex are the Logistik and World Trade Centre (WTC) industrial parks, and a 300-ha industrial zone in which 30 businesses operate. According to López, the estate is home to an estimated 12,000 people in the 5000 residential properties that have been built so far. It also features a waste treatment facility, and López maintains that the focus of planning procedures in San Luis Potosí is to prioritise vulnerable populations and install high living standards in the state.
San Luis Potosí is also home to Ciudad Madera, or Wood City. Located in the municipality of Villa de Reyes, the estate is a few minutes from the General Motors and BMW plants, and the Logistik and WTC parks. It will feature 8000 houses, which are aimed at attracting middle- to high-income families. By May 2019 the project had paved 90% of a new access road and made some progress on the construction of leisure facilities.
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