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Tuesday, January 31, 2023

It’s a buyer’s market in an overbuilt Riviera Maya

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Bahia Principe beach in Tulum. Photo: Getty

The Riviera Maya — a 1999 rebrand of the “Cancún-Tulum corridor” — has seen huge levels of residential development. So much so, in fact, that buyers have gained an advantage.

Despite anecdotal accounts that the pandemic has persuaded hundreds to follow their Caribbean dreams to Tulum and Playa del Carmen, a vast supply of new builds is proving difficult to shift, and some sellers are having to reduce prices, according to the Financial Times.

In 1998, Playa del Carmen had a population of 20,000. Twenty years later, it had grown to 252,000, and is expected to top 300,000 by 2023, according to Mexico’s Population Council. Property prices in Quintana Roo, the Riviera Maya’s state, have also been climbing steadily.

But due to rapid development in recent years, estate agents report that buyers are able to negotiate harder for discounts on many of the area’s new-build condos.

Tulum has a reputation as a relaxed tourist haven famous for its Mayan ruins and its eco-chic vibe, in contrast with the high-rise resorts, frat bros and glow parties in Cancún and Playa del Carmen during spring break, a story in the Financial Times points out.

In 2013, when Carlo Toluzzi, a partner at estate agents Engel & Völkers Playa del Carmen, bought some land between Tulum town and the beach to build a house for himself, “there was nothing but jungle,” he recalls.

Tulum has exploded. Prices in Tulum range from between $2,000 to $4,000 per square meter, compared with $3,800 to $7,000 in Playa del Carmen, according to Sotheby’s International Realty.

Studio apartments within walking distance of the beach sells for around $100,000 and are popular with younger buyers, Toluzzi says.

Liszett Torres, of Sotheby’s International Realty, says her Riviera Maya office sold more homes in 2020 than in 2019, but “there is too much supply; there is more supply than demand, so the buyers are in control.” There are currently 380 developments in Tulum offering apartments for sale, built in the past three to four years, she estimates.

A new airport near Tulum, and the Mayan Train — linking the coast with Cancun and other Peninsular destinations, will likely turn up the heat. This also strains environmental conditions, impacting mangroves and cenotes.

“It’s this weird thing where people with a lot of money just want to relive the hippy time,” Toluzzi told FT. “But the sad thing is that a lot of people are not aware about the destruction.”

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