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Hot Trends in Second Home & Vacation Property Markets

Craig Hogan | April 30, 2024

Hot Trends in Second Home & Vacation Property Markets

The real estate market is dynamic, with significant growth observed in second homes and vacation properties. These properties, ranging from beachfront condos to mountain retreats, provide escapes and lasting memories as well as lucrative returns on the investment.

Increased Demand for Vacation Properties:

Demand for vacation properties has surged as individuals seek reprieve from daily routines. Factors like personal enjoyment, rental income potential, and long-term investment value drive this demand, especially in areas with strong tourism industries such as Puerto Vallarta. A review of many Facebook posts will quickly reveal a popular topic of discussion; the long wait times to get Mexican residency at all the Mexican consulates across Canada and the US. The Baby Boomers and the GenX folks are retiring or retiring early, and they are looking to get that second home in paradise. 

Emphasis on Location and Amenities:

Location plays a crucial role, with buyers seeking proximity to popular destinations and attractions. Properties offering unique features like private pools or scenic views attract higher interest and command premium prices.

Growth of Short-Term Rental Market

Platforms like Airbnb have transformed the vacation rental market. Many buyers purchase second homes for rental income, benefiting from short-term rentals to offset costs and generate profit. While many cities have recently implemented various restrictions on short term rentals, Puerto Vallarta has no such restrictions. PV is a perfect example where the short-term rental market is a huge driver of the local economy and there are not likely to be any restrictions implemented. 

Remote Work and Lifestyle Changes:

The pandemic accelerated remote work trends, increasing the appeal of second homes. Buyers prioritize properties offering work-life balance, outdoor access, and scenic surroundings. Once again, PV comes out on top here as high-speed internet is abundant ad cheap. The fact that the airport has many direct flights to cities across Canada and the US also makes it popular for those who need to occasionally return to the head office or to attend client meetings in the US or Canada.

Financial Considerations and Investment Potential:

Buyers must consider ongoing costs beyond the purchase price, evaluating factors like property taxes, insurance, and potential rental income. Historical appreciation rates and future development potential are also crucial. PV checks all the boxes in this category with a 60% increase in average condo prices in the last 5 years. PV homeowners also enjoy an incredibly low 0.086% tax rate. The popularity of PV as a vacation destination has also driven up rental demand as well as per night rental rates, making ownership for the sake of rental income very attractive.

 
 

 

Sustainability and Eco-Friendly Features:

Features like energy-efficient construction and renewable energy systems enhance appeal and long-term value. Eco smart construction techniques are starting to be a part of most new developments in PV.

In conclusion, the market for second homes and vacation properties is experiencing notable growth and evolving trends. The increased demand, emphasis on location and amenities, growth of the short-term rental market, remote work opportunities, financial considerations, and sustainability features are all key factors shaping this niche market. increasingly prioritize eco-friendly properties. conclusion, the market for second homes and vacation properties is thriving, driven by various factors.

This story and more are courtesy of our partner @NikValcic.

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