🌴 Why La Paz Real Estate Is Heating Up in 2025—And What It Means for Buyers

By Ian Wilson, Broker of Dream Baja Realty

📈TL;DR:

• Home prices in Mexico have increased 146% over the past decade—and the momentum isn’t slowing.

• Baja California Sur, particularly La Paz, is seeing massive demand from both foreign and domestic buyers.

• Delaying your purchase could mean paying significantly more in the next 3–5 years.

• Building costs are also climbing—affecting both resale and pre-construction investments.

• There’s still time to secure your dream home in La Paz—but that window is closing fast.

Mexico’s Real Estate Market Is Booming—And Baja’s at the Heart of It

Let’s get right to it—Mexico is in the midst of a real estate surge. House prices across the country have risen an astonishing 146% in just ten years, outpacing inflation and making it one of the most attractive property markets in the Americas.

Here in Baja California Sur, and especially in La Paz, the momentum is even more palpable. As the founder of Dream Baja Realty, I can tell you firsthand: demand is outpacing supply, foreign interest is stronger than ever, and savvy buyers are moving quickly to lock in value before prices climb higher.

The numbers speak for themselves: average property prices in Mexico rose about 9% between 2023 and 2024, and projections for 2025 show another 3-7% increase nationwide. But in high-demand regions like La Paz, we’re seeing appreciation that far exceeds the national average—especially for well-located homes, gated communities, and coastal properties.

📍 Why La Paz?

La Paz isn’t just another beach town—it’s the capital of Baja California Sur and one of the few places in Mexico that still offers luxury living at relatively accessible prices. It’s safe, walkable, welcoming, and offers the kind of community lifestyle many Americans and Canadians crave when looking for a second home, vacation retreat, or retirement destination.

Whether you’re exploring neighborhoods like Pedregal de La Paz, Puerta Cortes, or El Centenario, there’s an undeniable energy here—and our clients feel it the moment they arrive.

💸 What’s Driving the Price Growth?

• Inflation & High Demand: As with the rest of Mexico, housing demand is outpacing supply, especially in desirable coastal cities.

• Foreign Investment: Americans and Canadians are increasingly viewing La Paz as a safer, more affordable alternative to home.

• Limited Inventory: With strict environmental protections and thoughtful urban planning, available land and homes in La Paz are finite—and that scarcity is driving value.

• Rising Construction Costs: As of early 2025, average construction costs in Mexico hover around 15,423 MXN per m2 but in La Paz’s market, due to it's location in Baja California Sur, you’re often looking at 18,000 - 22,000 MXN per m2 for high-end finishes.

So even if you’re considering building from scratch or investing in a pre-sale home, don’t expect prices to stay flat. The cost of labor, logistics, and materials is increasing steadily—especially for ocean-view and gated properties.

🏡 Current Price Ranges in Baja California Sur

Here’s what we’re seeing on the ground at Dream Baja Realty:

• Entry-level homes (often needing renovation): 2.8M–3.5M pesos

• Modern mid-range homes in neighborhoods like Fidepaz or Colina del Sol: 4.5M–6.5M pesos

• Luxury homes in Pedregal, Puerta Cortés, or the Malecon area: 8M–15M+ pesos (with some exceeding $5M USD for waterfront estates)

One of our developments, Villas de Oasis offers brand-new 2–3 bedroom homes with pools and rooftop decks starting at $160,000 USD—a price point that’s becoming harder to find every year.

🇲🇽 Is It Still Affordable Compared to the U.S. or Canada?

Yes—for now. But here’s the truth: waiting five years could mean watching your dream slip into a different price bracket. What might feel like a stretch today could be completely out of reach tomorrow.

In fact, we’re already seeing late buyers from Canada and the U.S. say, “We wish we’d bought back in 2022 when we first visited.” That regret is real. And with building permits tightening and infrastructure demand growing, prices aren’t likely to reverse.

💬 Let’s Talk About Gentrification

Yes, gentrification is happening in some parts of Mexico—but it’s only part of the story. What’s driving price increases in places like La Paz isn’t just foreign demand—it’s the fundamental housing shortage across the country. Even states with minimal tourism, like Michoacán and Sinaloa, are seeing dramatic price hikes.

In cities like Mexico City, the housing shortfall is expected to reach 2.8 million homes. That national pressure filters outward—and towns like La Paz, which offer quality of life and proximity to nature, are seeing the effects.

🧠 Final Thoughts from Dream Baja Realty

If you’ve been watching La Paz from afar, now is the time to act. Mexico’s real estate market isn’t just growing—it’s transforming. The ability to own a luxury home steps from the Sea of Cortez for a fraction of U.S. prices is a rare opportunity, but it won’t last forever.

At Dream Baja Realty, we specialize in helping Americans and Canadians relocate with confidence. We’ll walk you through the buying process, connect you with trusted legal partners, and help you find the right neighborhood, home, and investment for your goals.

Ready to explore what’s possible in La Paz?

🏡 Visit Dream Baja Realty browse current listings or download our free relocation and home-buying guides.

Your dream home in Baja is closer than you think - here's a taste of what's available right now for under $300,000 USD: