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Explosion in foreign property investment in Mexico expected

But not everyone is happy. Many Mexicans complain about the rapid growth of the American population in their neighborhoods, the threat they see to Mexican culture and language, and the possible drain on Mexico's inexpensive health care.

Mexico has always been popular with US property investors, especially Texans from just across the border and those who want a retirement home. Tens of thousands baby boomers are expected to buy across the border in the next few years.

'You'll see that more and more of these baby boomers will see Mexico as an attractive place to retire simply because their dollars will go further,' said Mexico's ambassador to the US, Arturo Sarukhan.

Already, more than two million Americans own property in Mexico, with an estimated one million of them living there permanently, said Suzan Haskins, Latin American editorial director of International Living magazine, and many are Texans. 'Texans have such an affinity for Mexico because of history and geography. They feel very comfortable,' she explained.

The government is certainly keen to see more foreign investors and some, including Mexican Tourism Minister Rodolfo Elizondo, want a change in ownership laws to allow foreigners to own property in Mexico outright.

Under Article 27 of the Mexican Constitution foreigners must use a renewable bank trust fund, or fideocomiso, which limits ownership to 50 years for property within 60 miles of the border or 30 miles of a coastline. Elizondo believes direct ownership would lead to more foreign investment in Mexico.

This has led to foreign property investors being scammed by sellers with fake property documents.

But there is also a growth in protest groups who don't want a huge influx of foreign buyers in Mexico. 'They think Mexico, especially San Miguel de Allende, is an extension of their country,' said Arturo Morales Tirado of protest group Basta Ya.

Others are angry over what they consider to be the privatization of beach land. Under Mexican law, beaches are federal land and are open to the public. A group of women in Nayarit state routinely demonstrate against posh hotels, some of which assign armed guards to keep all but guests away.

'We're not against Americans. We're against big corporations, many of them from the United States, taking our beaches away,' explained Marielza Izurieta Valery, president of United Women for the Banderas Bay.

Some Americans are eager to integrate. In San Pancho, Nicole Swedlow, a single mother of two from California has started a nonprofit organization aimed at building ties between Americans and Mexicans with donations coming mostly from US retirees.

'The last thing I want to see is an extension of California deep into Mexico, where Mexicans are priced out of their own communities. It's our obligation to ensure that we build bridges, learn their language and celebrate their culture. We need to learn to coexist,' she said.