With a faltering home economy, Brazilians have been busy investing their money into real estate in South Florida and according to an article by abcnews.com they are not the only foreign investors to do so. There are also plenty of Mexicans, Colombians, Venezuelans and French and Turkish buyers interested in finding a safe haven for their cash, away from their own economies.
This influx of cash has helped to transform the real estate market in Miami. Where it used to be a retirement hub, it is now becoming a haven for overseas investors and over the past decade has undergone a dramatic change. A downtown that used to have many empty lots now has luxury condos and upscale retailers and developers are confident the demand will continue.
At the moment there are well over 100 residential towers being planned for construction in South Florida and the majority of homes purchased by overseas buyers are for cash. In 2015 foreign buyers purchased $6.1 billion of real estate in Miami, accounting for just over a third of investment into the area. This is a huge figure compared to national statistics, where foreigners accounted for just 8% of real estate sales. This influx of overseas money has been sufficient for the government to announce plans to monitor real estate purchases by shell companies in Miami and New York.
Sales of property to Brazilians did briefly falter last year when the value of the real fell against the US dollar, but concerns about a worsening economy has led to sales picking up once more, even though the weaker real means the cost of US real estate has risen significantly. The average price of a luxury condo in Miami has increased by 35% over the past year, to reach $3.7 million.
Although these changes are significant, they have had very little impact on native Miamians who have actually seen wages decline over the past year and unemployment is above the national average. In addition, Miami has a large proportion of renters who spend more than 30% of their take home pay on housing. This is a level seen as being a burden as the Census Bureau data shows that 66% of renters in Miami are facing high rents, compared with 52% nationally.
Workers in the area have few affordable housing options and the money pouring into the area is not feeding into the local economy. As a result, local businesses are impacted and there is less opportunity to create affordable year-round housing for workers, who are leaving the area.