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The Mexican homebuilding industry is "booming" said Fitch Ratings, in a report released at the end of last month.

The New York and London based financial experts said that the Mexican government has helped the sector and that further growth could be expected.

They reported that housing is one of the country's most "dynamic industries", transformed over the past few years by a developing Mexican mortgage market.
Cozumel construction
Homebuilding in Cozumel.

The report's authors explained that a favorable economic climate has increased the types of funding available in the market, making it easier to borrow money to pay for construction.

Gurjit Lalli, developer of Hacienda Monte Cristo condos in Cozumel, said, "The report has confirmed what locals know already: the real estate market here is strong and makes for a solid investment".

In a more cautious tone, he also warned that Cozumel needs to be careful that the boom doesn't sacrifice quality for quantity in new homes being built.

The Fitch report went on to say that since 1995 Mexican home prices have been "extremely stable in real terms" and that the housing downturn in the US has had a "limited effect" in the Mexican market.

Fitch concluded that the Mexican housing market is "solid" and the potential for more growth is "strong", primarily in the low-income level market.

They noted that future growth will partly depend on general economic conditions and the removal of bureaucratic barriers.

The full report: "Credit Availability Underpins Homebuilder Growth — Challenges and Risks Remain", is available from Fitch Ratings website.

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