The Real State of Mexico's Tourist Real Estate Market: 2025 Without the Hype

In recent years, the narrative around Mexico's tourist destinations has been dominated by promises of endless capital gains, double-digit vacation rental returns, and "can't-miss" investment opportunities. But 2024 and 2025 are making one thing clear: much of that was smoke and mirrors. Here's a direct, honest review of the actual state of Mexico's tourist real estate markets.

Tulum and the Riviera Maya: From Boom to Correction

Tulum has become the perfect example of oversupply. In 2025, there are over 11,000 active vacation rental units, and average occupancy has dropped below 21%. Airbnb rates are falling, yields are collapsing, and many investors are trying to exit with discounts of 15% to 30%. Add in rising insecurity, poor infrastructure, and stalled projects, and it’s clear: the bubble didn’t burst, but it’s definitely deflating.

That said, some long-term investors with deep pockets see this correction as an opportunity. With discounted prices and distressed sellers, they're following the mindset famously stated by Baron Rothschild: "Buy when there's blood in the streets." They're acquiring well-located assets at below-peak valuations, positioning for future upside once the market stabilizes.

Playa del Carmen is also adjusting, though its fundamentals are more stable than Tulum's. While it no longer has the explosive momentum of 2020–2022, it remains a consolidated market with strong tourism infrastructure and brand recognition. There is a moderate oversupply of vacation condos, and short-term rental occupancy has softened (currently around 25%), but many well-located, well-built developments continue to perform respectably.

Prices in key areas remain relatively stable, and certain projects near the beach or downtown still see solid interest from both national and international buyers. Playa del Carmen may no longer be a speculative boomtown, but it continues to offer long-term value in premium locations with good property management and a strong product.

Cancun, on the other hand, remains more stable: active sales, reasonable occupancy, and functional rental returns. But the Caribbean hype isn’t what it used to be.

Markets Showing Real Growth and Profitability

1. Los Cabos

• Sales up +27% in 2025.

• Average sale prices increased +50% year-over-year.

• Strong vacation rental demand, booming luxury tourism.

2. Merida

• Constant internal migration.

• Rents rose +20% in two years.

• Central areas show capital gains up to +40%.

3. Queretaro

• Massive projected population growth (+125% by 2050).

• Homes between MX$1M and MX$5M selling well.

• Stable capital gains around 11% annually.

4. Cancun

• Steady tourist flow, healthy occupancy.

• More solid fundamentals than Tulum or Playa del Carmen.

  
  

Puerto Morelos: Stability Without Speculation

Puerto Morelos sits quietly between Cancun and Playa del Carmen, offering a more laid-back, family-oriented atmosphere. While it doesn't have the explosive growth or hype of its neighbors, it benefits from a more stable, less saturated market.

• Some new vertical developments have shown healthy absorption rates.

• The area appeals to travelers looking for quiet beachfront stays, making it viable for mid- to long-term rentals.

• Prices remain accessible compared to Playa and Tulum.

  
  

However, the market moves slowly, and resale activity is limited. While not a high-yield investment zone, Puerto Morelos may appeal to investors prioritizing stability and low volatility over speculative gains.

Oaxaca Coast: Potential but No Boom

Puerto Escondido, Mazunte, and Huatulco offer lifestyle appeal and boutique tourism. Puerto Escondido saw a mini-boom post-pandemic due to digital nomads, but there is very little hard data on sales, pricing, or appreciation. Infrastructure is limited, many lots lack clear titles, and liquidity is low. Huatulco is more orderly but slow-paced, appealing mainly to Canadian retirees.

That said, this region could be seen as a pre-boom market still in early development. It offers long-term potential, especially for those with vision and patience. —still raw, not fully discovered, and with room to grow. It's not yet booming, but it’s definitely on the radar.

Caution With...

• Mazatlan, Puerto Escondido, and Huatulco: Great potential, but little reliable data. Puerto Escondido and Mazunte are lifestyle-driven with low transaction volume and infrastructure challenges. Huatulco is stable but slow. No evidence of a current boom.

• Tijuana: Strong appreciation in recent years, but recent oversupply of condos. Rents are falling, and time-on-market has increased significantly.

  
  

Conclusion

Today more than ever, you have to separate marketing from reality. Tulum is a clear case of what happens when supply far outpaces demand. Meanwhile, places like Los Cabos, Merida, and Queretaro are growing on solid fundamentals: population growth, employment, stable tourism.

Investing in 2025 requires looking beyond the hype. Not everything trendy is a good deal. Look for real data, organic demand, and markets with proven liquidity.

If you're considering real estate investment in Mexico, make sure to do your due diligence and don’t buy just because "everyone is buying." The best decisions are based on data, not promises.