Los Cabos Home Prices Skyrocket, Squeezing Locals Amidst Tourism Boom

LOS CABOS, MEXICO – For the global elite, the southern tip of the Baja California peninsula has become a byword for sun-drenched luxury. But behind the gates of multi-million-dollar villas and gleaming new condominium towers, a starkly different reality is unfolding. Los Cabos is in the grip of an unprecedented real estate boom, cementing its status as Mexico’s hottest market while creating an increasingly desperate and unaffordable housing crisis for the local community that serves its thriving tourism sector.

An Investment Engine at Full Throttle

The sheer velocity of the market’s ascent is staggering. Karim Oviedo Ramírez, the national president of the Mexican Association of Professional Realtors (AMPI), recently highlighted the region’s explosive growth. “I believe it is the champion of housing value appreciation,” Oviedo stated, confirming a rise of “more than 14% compared to the previous year.” He noted that this crowns Los Cabos as the market with the highest real estate capital gains in the entire country.

This growth is no accident. It’s fueled by a relentless wave of foreign capital, primarily from American and Canadian buyers seeking second homes and high-return rental properties. Drawn by the region’s legendary sport fishing, 18 major golf courses, and secure lifestyle, investors are pouring money into new developments. The “Golden Corridor” stretching between Cabo San Lucas and San José del Cabo is a constant buzz of construction, with a heavy focus on vertical condo complexes and master-planned communities. According to Oviedo, new projects with entry points between $350,000 and $500,000 USD (7 to 10 million pesos) are now the norm, placing Los Cabos at the apex of Mexico’s property value chain.

“For our association, Los Cabos is a strategic municipality because it has many investments,” Oviedo explained. “It is an important place to invest, generating good returns.”

The Growing Strain on the Local Community

But this investment engine is exacting a heavy toll. As foreign buyers convert more of the available housing stock into lucrative short-term vacation rentals on platforms like Airbnb and Vrbo, the supply of long-term homes for residents is evaporating. The resulting scarcity has sent local rental prices into a dramatic upward spiral. Stories are now common among hotel workers, restaurant staff, and construction laborers of monthly rents doubling in just a few years, forcing them into grueling daily commutes from more affordable, distant communities.

This housing squeeze has morphed from a background concern into a central social crisis, exposing the widening chasm between the opulent tourist experience and the daily struggle of the workforce that makes it all possible. The critical challenge now facing local authorities and developers is to strike a delicate balance—one that can sustain the profitable tourism machine without permanently displacing the community that forms its very backbone.

A Tale of Two Markets: Los Cabos vs. Tulum

The situation provides a sharp contrast to Tulum, another of Mexico’s famed destinations. For years, Tulum’s market was narrowly focused on a trendy, “eco-chic” luxury niche. That over-concentration created a bubble, and with an oversupply of similar high-end properties and infrastructure failing to keep pace, its market has cooled considerably.

Los Cabos, on the other hand, has so far built a more resilient foundation by attracting a more diverse range of buyers—from billionaires seeking oceanfront estates to investors buying more moderately priced condos. For snowbirds and developers, opportunities still abound. But for the local families of Los Cabos, the ongoing housing crisis is a stark and painful reminder of the profound social costs that can accompany a runaway boom.