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Latin Americans, and the future of the real estate market
Posted on: June 12, 2019
By: D'Latinos

The Latin American market is one of the most important real estate markets in Miami, it has been that way for more than 15 years and trends vary according to the reality of each country.

Between 2009 and 2015, the Miami market had a historic streak since most Latin American countries were buying at the same time, from Argentina to Mexico. Each of them had its peculiarities, but Latin America was experiencing a very positive economic moment that translates to the enormous presence they had in the market during that time.

"Today, that situation has changed and the markets that were previously protagonists have now temporarily decreased their participation, including Argentina and obviously Venezuela," said Ryan Shear, principal of Property Markets Group.

From Argentina to Mexico in South Florida

South Florida has been and will continue to be an attractive destination for foreign buyers, who accounted for 65 percent of real estate purchases. "Latin American buyers will continue to integrate into the Miami real estate market because they are culturally, financially and spiritually connected to the city," said KAR Properties CEO Shahab Karmely. “The total value of properties sold to foreigners increased in 2018 to $ 8.7 billion, compared to $ 7.1 billion in 2017.

Most of those foreign buyers are Latin Americans, who continue to rely on Miami as an investment opportunity.

Brazil acquires prominence

According to the Miami Realtors Association report published in April, Brazilians accounted for 17 percent of shoppers, followed by Venezuelans with 13 percent, Argentines with 10 percent and Colombians with nine percent . Brazil has begun to grow and there are interested Brazilian buyers who are closing contracts between $ 1 million and $ 5 million. Argentina will have elections later this year and its results will cause the Argentines to return to Miami. Colombia is a more stable and permanent market, although not in the same volume as in 2002-2007, where it was undoubtedly the largest market in conjunction with Venezuela.

The strength of the US dollar

On the other hand, the strong US dollar is affecting sales and prices. “For example, for Canadians, the dollar change has increased by 30 percent, so it is much more expensive to buy or transport a property here. Therefore, Canadians have hesitated to jump into this market, ”says Liz Hogan, executive director of Luxury Estates at Compass Florida. “However, for Latin American countries where there is political turmoil, the desire to move money out of their countries and place it in a safe haven like the United States exceeds exchange rates. Properties with a price below $ 500k are still in great demand, and this sector of the market is still very strong, so there may be pressure on the escalation of price levels.

"Today we see that Venezuelan buyers are replaced by Brazil, Argentina, Mexico and Colombia," said Kenneth Baboun, managing partner of BGI Capital.

The reality of Mexico

According to these sources, Mexicans are increasingly interested in buying properties in Miami, due to the change in a left-wing populist government that causes many new investors to see Miami as a possible residence market. Mexico is becoming a more important demographic and a player of great power. Now there is a more active Mexican market driven by the political reality of his country.

"Brazil and Mexico are the most powerful markets in Latin America, and we believe that in the coming years they will continue to consolidate as the most important real estate markets in Miami ," Kenneth Baboun added. This is one of the most recent trends that is being seen in the real estate market in Miami.

Wave of foreign investors over Miami

YOTELPAD Miami, a mixed-use hotel and residential developmentto be held in Downtown Miami. OneWorld Properties, the exclusive development sales team launched project sales in June 2018 and has become one of the fastest selling projects in the state, with 80% of sales in less than 9 months, and Mexicans are their main buyer with 28%.
SMART BRICKELL. developed by Habitat Group, is another mixed use development that has also had very fast sales.

The intelligent three-tower project, which will be completed in 2021, will integrate intelligent use, intelligent design and technology into each of its towers. Unit owners will be able to rent their condos up to 24 times a year using popular applications and programs to share the home like Airbnb or participate in an optional two-year fixed annual lease program that guarantees two years of rent at a fixed interest rate.

The South Florida market does not stop growing and provides security.

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