Foreign Drivers of High-end U.S. Real Estate Recovery Face Economic Troubles
Jul 22, 2013 July 22, 2013
The slowing economies of emerging markets, such as China and Brazil, threaten to forestall the growing recovery of Miami’s high-end real estate market. Given that a major factor of the recent recovery has been thanks to investments from wealthy foreigners from South America and China, suffering stock prices and undervalued currencies could lead to a falloff of high-value purchases from these foreign real estate investors. It is projected that Miami could lose a devastating share of high-end condo sales thanks to the economic downturn in Brazil.
Brazilians currently hold a 12 percent share of Miami’s overall real estate sales and makeup much more of the high-end market. Two-thirds of those buyers purchased condos or apartments priced at over $200,000. The market predicted to receive the brunt of the potential slowdown is the luxury condo market with individual units typically selling for between half a million and $3 million. The Biscayne Corridor could be especially hard hit since 60 to 75 percent of buyers in this market are Brazilian.
However, the so called “ultra-luxury” market, could actually benefit from the South American troubles, since the super wealthy in those countries tend to buy assets in the U.S.