Investors chase 14% yield in Mexican housing recovery: mortgages

mexico

mexicoBy Ben Bain | Bloomberg

To Adrian Parra, the 436,375 peso ($30,000) mortgage he got in Mexico in 2008 is a burden he can’t shake. He says inflation-linked increases to the principal have helped push the amount he owes to more than 500,000 pesos after six years of payments.

To investors, mortgages like Parra’s are an opportunity to seize in Mexico’s rebounding housing market.

This must be “a very profitable business,” said Parra, 37, a financial adviser in Mexico City. “But since I’m a homeowner, it’s really not.”

Foreign investors have poured into Mexico’s first mortgage real-estate investment trust, which is using some of the 8.625 billion pesos raised in a share sale last month to fund purchases of inflation-adjusted mortgages.

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