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Sunday, December 4, 2022

Remember when Mérida was cheap?

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Developments such as City 32 are evidence of Mérida’s emerging status as something other than a cheap place to live. Photo: Courtesy

They generally arrive for two reasons: safety and quality of life. Living in Mérida is cheap… or perhaps it used to be and that is why in recent years the Yucatecan capital has received thousands of people every month.

At the beginning of his term, Yucatán Gov. Mauricio Vila estimated that during his six years in office, the population of Yucatan – at that time 2 million people – would grow by another 200,000 inhabitants. That means 600 more people every week. A block of houses every seven days. In light of the facts, it seems that he fell short.

What has been the largest source of immigration in Yucatan? The Spanish in the 19th century? The Lebanese in the 20th century? American and Canadian expats?

No. It’s from Mexico City, he replied immediately.

The city’s borders are ballooning. Renán Barrera has been the mayor of Mérida since 2018. When he started, his concern was to monitor his municipality, now he has to work within a metropolitan area in which he shares responsibilities with leaders in Progreso, Conkal, Hunucmá, and Kanasín.

According to INEGI, most prices have not grown much more in Yucatán than in the rest of Mexico. Food increased 12% in the last 12 months, while in rest of the country it rose 14%.

But housing is beginning to show signs of taking off. In 2022, housing inflation already exceeds the national average. Home values ​​rose 3.5% in 12 months and rents 3.4%. That is above the rest of Mexico.

In Mérida, it grew 8.1% in one year, according to the Federal Mortgage Society.

Today few houses in the north, where economic activity is concentrated, sell for under a million pesos.

Five years ago, modern but modest subdivisions, such as Las Américas or Gran Santa Fe, still sold properties for about 600,000 pesos. Today they sell for a minimum of around 1.5 million pesos. Of course, for that price in Mexico City perhaps 50-square-meter apartments are available on Av. Dr. Vertiz.

That’s why people keep coming to Yucatán.

“This hotel is full of godínez like me, all doing business,” said the owner of a consulting firm from Monterrey. She is helping a food producer who wants to set up a new factory on the Peninsula. “They want to come because there is water here and in the north of Mexico, that resource is already a gamble.”

Kekén, from Grupo KUO, and Grupo Modelo were the first to notice it and in 2018 both began export production of pork and beer, respectively. Then came the manufacturers: the German manufacturer, Leoni; Chinese kitchen manufacturer Woodgenix; Uchiyama auto parts; two boat factories… all joined some aircraft parts producers and local export companies like Falco, run by David Gibellini, which serves, among other clients, Tesla.

Then came the problem of energy and the port of Progreso, which could mean a bottleneck in the face of unfulfilled investment promises by the federation.

Given this, Yucatán turned to an industry that does not require many additional resources: Information technology.

The influential consulting firm Accenture has just moved into a Tekax property that is unprecedented in the state. The luxurious City 32, north of Mérida, was built by Grupo Palace and includes a hotel and a shopping center adorned with marble floors and walls. Its anchor restaurants are Bachour, a replica of the original in Miami, and Habibi, a brand that also serves the Moon Palace in Cancún. It is in front of another Fibra Uno shopping center and 1.5 kilometers from Grupo Gicsa’s La Isla. In the center of all this, local investors built the mega luxe development Aqua Avenue across from the hospital Faro del Mayab. In the area, the average annual income per household is around US$60,000.

The state government now boasts a list of technology companies such as the local National Soft, Dacodes and Blue Ocean, along with other foreign companies that hire Mexican talent here: Preh, Amazon, Nearshore Technologies. In the middle they joined 4thSource; Verato, Nearsoft, Ksquare, Logismic. They offer minimum wages of 15,000 pesos per month, well above federal standards. The days of a cheap Mérida seem to be ending fast.

Adapted from an article by Jonathan Ruiz Torre in El Financiero

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