Annual Rent Increase and Stagnant Housing Supply
According to Tinsa México, the cost of renting a home in Mexico City has risen by 10% annually so far in 2025. This surge is driven by high demand, limited new housing supply, and the concentration of homes in high-value areas.
Expert Insights
Justino Moreno, the director of consultancy at Tinsa México, explains that this increase is linked to contract renewals, with adjustments typically aligned with inflation rates. However, when there’s a change in tenants, rental hikes can range from 15% to 30%. Moreno also notes that rental price fluctuations depend on housing availability.
The Rising Importance of the Rental Market
In 2020, rental housing accounted for 24% of Mexico City’s housing stock, comprising over 663,000 units, according to the National Institute of Statistics and Geography (INEGI). This figure was only 22% in 2010, highlighting the growing significance of the rental market.
Government Initiatives
Facing this situation, the Mexico City government seeks strategies to alleviate rental price pressure and bolster housing supply. One such initiative is Bando 1, a plan with 14 actions aimed at curbing gentrification and promoting affordable housing in low- to middle-income areas.
Development Timelines
Enrique Téllez, co-director of Desarrolladora del Parque, emphasizes the role of authorities in fostering housing access but warns about the time required to realize these efforts. He states that smaller or medium-sized housing projects take around three years, while larger developments can take between three to seven years before impacting the housing inventory.
Most Expensive Rental Areas
Tinsa México reports that Benito Juárez, Cuauhtémoc, and Miguel Hidalgo alcaldías house over 38% of rental units (more than 208,000) but face increasing pressure on prices due to high occupancy and demand.
Citywide Impact
Téllez stresses that the housing supply shortage affects the entire Mexico City, impacting both home purchases and rentals. He explains that the issue isn’t limited to popular neighborhoods like Roma or Polanco but is citywide, causing constant pressure on housing prices.
Accelerating Housing Construction
In this context, Téllez reiterates the importance of expediting construction processes to increase housing projects. Otherwise, the rental price trend may persist or even intensify in upcoming years.
Key Questions and Answers
- What is causing the rise in rental costs? High demand, limited new housing supply, and concentration of homes in high-value areas are driving the increase.
- Which neighborhoods have the most expensive rentals? Roma Norte, Cuauhtémoc; Tabacalera, Cuauhtémoc; Ampliación Granada, Miguel Hidalgo; Merced Gómez, Álvaro Obregón; and Roma sur, Cuauhtémoc are the priciest neighborhoods.
- How is the Mexico City government addressing this issue? The government is implementing strategies like Bando 1 to curb gentrification and promote affordable housing in low- to middle-income areas.
- What challenges do housing projects face? Smaller or medium-sized housing projects take around three years to impact the housing inventory, while larger developments can take between three to seven years.
