How the Canadian and American Media Unjustly & Negatively Affects Tourism, the Working Man's Economy and Real Estate in Puerto Vallarta, Mexico
By: William McFadden; a Canadian expat, business owner, working & residing in Puerto Vallarta, Mexico, May 8, 2009
Living in Puerto Vallarta for over eight years; I have seen during that time how some of the media in the USA and Canada will pick up on anything negative that happens in Mexico. They then glamorize it into a news release that makes people reading or viewing the reports, think that Mexico is a very undesirable place to visit or live. I have lived in what would be considered a relatively safe place in Canada, that being Edmonton, Alberta, for 31 years prior to moving to Puerto Vallarta. I can tell you that Edmonton is by far a more dangerous place to live than Puerto Vallarta. It seems the media has a fascination for sensationalizing anything that occurs in Mexico and this reflects in the fact that Americans and Canadians are uncomfortable about visiting or retiring in Mexico. Puerto Vallarta, in contrast, is a virtual Paradise.
Most recently; the combination of the World's Financial Crisis, Swine Flu (HINI), corruption in the government and the negative publicity concerning the internal fight against the Drug lords have had an extremely bad economic effect on Mexico: an effect that is mostly unjustified. This article will present a very different viewpoint for most parts of Mexico. This is not to say that I believe there are areas in Mexico where I would not live while having the same freedoms and comfort in the safety as in Puerto Vallarta. Having lived and worked in Puerto Vallarta as a business owner, realtor & architect for over eight years, I can attest to much of what I am about to report:
1. World Financial Crisis: Mexico and Puerto Vallarta are certainly affected in a very significant manner from this downturn. The resale and pre-construction real estate market has not come to a standstill but is certainly down by perhaps 85 to 90% by volume from the previous year. In the re-sale market, there are very good deals to be had on a hit and miss basis. Most properties are owned in Puerto Vallarta without mortgages and the cost of maintaining a property here is very low compared to the USA and Canada. If an Owner does not need the equity they have in a property, there is not a very significant financial drain by owning the property. Effectively the deals are from those that have a property here and need the equity elsewhere, be it in Canada or the USA and are often deeply discounting prices to obtain the equity they require. Other owners who are not in a financial pinch are simply riding out the economic downturn for good reason as they know the prices will rebound. This is currently a Buyer's market and for those properties that are selling, the sales prices are generally in the 2006 to 2007 market levels. Since this a popular tourist and retirement destination, these people are being quite wise. A few things to consider concerning owning property in Puerto Vallarta are:
a. Property taxes are a mere fraction of what they are in the USA and Canada. Currently in Puerto Vallarta, they are approximately 0.001 of the assessed tax value, which is generally lower than the market value. In my opinion, this will probably remain so as, although the cities and governments in Mexico need capital for development, the majority of the Nationals are still poor and cannot afford to have the property taxes increase significantly and the governments know this. The government cannot simply impose large increases to a population that does not have the money to pay for these increases. The result is a very significant benefit to a foreign owner as they also do not have to pay large property taxes and they can be relatively assured this will not change very quickly;
b. Puerto Vallarta has not seen, outside of the few properties mentioned above, the deep devaluation of real estate values as has been seen in many parts of the USA. There is good reason for this:
i. Puerto Vallarta is a very desirable location for a second home or even a place to retire to. One can live here very economically. It has an ideal semi-tropical climate even in the summer for those that can take a little heat and humidity. This is much easier to take than the minus 35 winter weather in parts of Canada;
ii. Most owners know that Puerto Vallarta will recover rapidly as the world comes out of recession so unless they are themselves in a financial crisis, why should they offer deep discounts for selling their properties?
iii. Puerto Vallarta is one of the safest places to live in the world, has very good flight connections to many locations in both the USA and Canada, provides almost a guarantee as to what to expect in the weather, has wonderful medical and dental care, has a myriad of charitable options for foreigners to get involved in should they want to assist Mexico's developing nature and has so many options for lifestyle.
2. The Drug War: There has been extreme negative publicity concerning the effective warfare between drug lord families trying to get control of this multi-billion dollar illegal business. Locally in Puerto Vallarta, there were some Drug Families that tried to move into Vallarta. The Federal and State Governments sent in the army and have made it very clear that Puerto Vallarta is a very significant tourist and foreign retirement community and they do not want to have the Drug Lord families playing havoc with that. This action has put a pretty good lid on this problem. Like any area, be it in the USA, Canada or Mexico, if one stays away from buying and participating in drug use, the area is extremely safe. In my past life of 31 years in Edmonton, Alberta, where there are drive by shootings and gang related crimes I have found that this is virtually unheard of the Puerto Vallarta. To give you a sense of what it is like to live here, please review the following:
a. I would not be concerned if my wife walked alone in most public areas of Puerto Vallarta, even in the middle of the night. She owned a restaurant for two years and frequently left to come home at 2:00 in the morning without an escort and nothing ever concerned her. In Edmonton, Alberta, I would not be comfortable with that even if both of us were together;
b. Most of the dangerous crime areas are around the Mexican/USA border which is the area that Hillary Clinton recently acknowledged that the USA is very connected to the cause of this problem. In her statements she said if it was not for the market for drugs in the USA, there would not be a problem with the smuggling of weapons and money from the USA to Mexico and conversely for the smuggling of drugs into the USA from Mexico. This acknowledgement has paved the way, in my opinion, for both the Mexican and USA governments to work cooperatively to fix this problem;
c. In Puerto Vallarta, like in any city in North America, there is an illegal drug trafficking business and like most cities if you choose not to participate, you live generally unaware of the problem and have a peaceful life unaffected by the problem. I have seen extremely unfair journalism concerning how bad Mexico is to visit while very little reporting is being done on the local problems that all cities have. An example would be reporting on how a USA or Canadian was killed while out partying. I look at this and realize how some tourists simply do not use common sense about how they party, where they party and how they act. In any country one must keep a sense of courtesy toward the local people and use common sense concerning how they act. Do the newsmakers report that when there is a brutal killing in Detroit that this should mean that people should avoid visiting the United States? No!!! but that would be a good comparative to use. The Canadian and USA news should report that it is a good idea to act civilly when you are a tourist in a foreign country, be it Mexico or Russia and keep your head about you so you will not get into trouble. I have seen too many tourists come to Mexico and think they can treat the Nationals with disdain and without respect. Mexican's are, for the most part, a very friendly people and are happy to assist tourists to have a good time. Most tourists are wonderful, come to have a rest and a good time and accomplish this. For those that are uncivil and get into trouble, where is the reporting on how tourists act and how they should act? The reporting should be telling people to keep their heads when they travel, keep away from getting too drunk that you lose your senses and definitely stay away from getting involved with drugs. Then you will most likely have a wonderful holiday.
3. Swine Flu: Another element that has crippled Mexico's economy recently is this flu which has created hysteria worldwide. Mexico acted with incredible integrity for the world in that they reported the disease and made all sorts of closures of businesses and schools to help contain this potential Pandemic. In the end, the flu has turned out to relatively minor with few deaths outside of Mexico and in reality about 100 deaths inside Mexico. This number represents cases when the disease was not known and people thinking it was only a common flu did not get treated on time. Major underlying chronic diseases also had a lot to do with the deaths. The number of deaths has been reduced significantly over the last few days due to better information acquired and all the preventive measures taken by the Mexican government. The majority of infections in Mexico have taken place in Mexico City and central states with zero cases in most Pacific states including the city of Puerto Vallarta. The international news now is a.. wait until this flu virus mutates and comes back again with a vengeance in the fall!!! How do they know this and what does it now have to do with Mexico. This influenza virus is now all over the world and if it does mutate, it could mutate anywhere in the world. I bet if you asked people about this, they still relate the potential problem to Mexico. In all probability this may well again be a mild flu causing insignificant deaths compared to the annual death toll from influenza related diseases. Unfortunately, the public perception will probably take time to waiver and Mexico will be unjustly punished in the meantime.
4. Government Corruption: Mexico is a developing nation, moving from the being a third world country to a developing nation and in time a fully developed industrial country. Some of its' primary assets are people, wonderful tourist destinations, a very rich culture and a people who are mostly pleased to welcome and make the tourists and retirees comfortable in being here. There is a history of corruption at all government levels and this will not be negated overnight. There has been a tremendous improvement even in the eight plus years that I have been here. Keep in mind also that this is a developing nation and is not as polished as the United States or Canada. I don't imagine that anyone in the USA and/or Canada could say that their governments do not have a lot of corruption as well but not as blatant. This problem should not tarnish Mexico with regards to tourism or buying a piece of property.
This covers the primary points & opinions that I have and wanted to express at this time. Puerto Vallarta has been our little piece of Paradise for over eight years and before that for another six years of frequent visits for quality of life, a wonderful work environment and I would invite anyone including the media to contact me for further information, to invest in dialogue about this wonderful place or to dispute what I have reported. My contact information is through McFadden Group Real Estate with the toll free number from the USA and Canada 1 877 651 3118. My personal e-mail is William@mcfaddengroupmexico.com or visit our web site www.mcfaddengroupmexico.com.
