Business

Mexico needs to build 800,000 houses per year to keep up with demand, shows a study funded by La Haus

Mexico needs to invest nearly 4% of its gross domestic product annually to build 800,000 housing units a year over the coming two decades to keep up with demand, a study showed Wednesday.

“That comes out to 3.87% of the (country’s) GDP … That’s what we need in Mexico. It’s ambitious, but feasible,” Albert Saiz, the Massachusetts Institute of Technology (MIT) associate professor leading the study, told Reuters.

The study, which is in its first phase, is being funded by Colombian startup La Haus, a residential marketplace to buy and sell primarily new developments, and was previewed Tuesday at a real estate conference in Mexico City, where La Haus also operates.

READ ALSO: Mexican Casai buys Brazilian startup of access control systems and electronic locks Loopkey

Demand for houses in Mexico is rising while the number of people living together is shrinking, Saiz said.

“In 1990, there were five people per home in Mexico. By 2020, there were only 3.6 per home,” Saiz said.

A number of homes in Mexico will also have to be replaced in coming years, Saiz said. Around 57% of homes were built by their owners, according to Mexico‘s national statistics agency, and many do not meet building codes.

READ ALSO: Brazilian proptech Loft makes its sixth acquisition since becoming a unicorn

“We have to think constructively about how to entice these owners as well,” Saiz said.

The next phase of the study would examine the political conditions and potential solutions to make construction possible, Saiz said, with a third phase studying execution of any strategy.

“We’re not doing it fast enough,” Saiz said, emphasizing that the power to fix housing issues tends to lie with local municipalities, instead of federal governments.

Well-funded, La Haus is investing in dignosis because it knows that there is a huge housing demand in Spanish-Speaking Latin America, not only Mexico.

Recall La Haus’ recently rounds:

  • Series B extension – $100 million led by Acrew Capital and Renegade Partners, debt funding
  • Series B – $35 million Series B round led by Greenspring Associates
  • Series A – $10 million led by Kaszek Ventures, after previously raising $6 million from NFX.

This post was last modified on June 3, 2022 4:53 pm

Share
Published by
Reuters

Recent Posts

Brazil’s XP launches a digital account with a debit card, real-time payments, and withdrawal

XP's digital account will be available to the investment platform's whole client base by October

June 20, 2022

Colombia’s first leftist leader Gustavo Petro targets inequality; investors on edge

The election of Gustavo Petro is indicative of widespread yearning for a more equal and…

June 20, 2022

After being acquired by Nubank, fintech Olivia will shut down operations

Artificial intelligence and financial planning startup Olivia will cease operations on July 15; Olivia's infrastructure…

June 17, 2022

Colombia’s Rappi to offer digital banking services via RappiPay

Rappi will offer deposit and savings products by the financial entity RappiPay, a joint venture…

June 17, 2022

Shopee announces layoffs in Latin American teams

Asian e-commerce phenomenon which has a strong presence in Brazil announced layoffs in Mexico, Argentina,…

June 17, 2022

South Korea’s Innospace to launch rocket from Brazil in December

Brazil is hoping to get a slice of the rapidly-growing small satellite launch market by…

June 17, 2022