Foreign buyers in Miami have traditionally consisted of South Americans, Europeans, Russians, and Canadians, but new figures from Integra Realty Resources showed that activity from Brazil and Argentina has slowed down lately due to a 42 per cent and 40 per cent (respectively) decline in both countries’ purchasing power since 2014.
Integra officials said that a weakening in the South American segment might trigger a crisis in Miami’s condo market, as this slice represents the lion’s share of foreign real estate investment in the city.
“The depth of the Chinese market, or the European or Canadian market, is not enough to make up for the South American buyer,” Integra senior managing director Anthony Graziano told the Wall Street Journal
According to research conducted by Miller Smauel Inc., the last quarter of 2015 saw a significant 20 per cent drop in Miami condo transactions on a year-over-year basis. This accompanied a 6.6 per cent decline in average sale price, as well as a 33.3 per cent increase in inventory.
Along with numerous cancellations of pending projects by multiple developers, these recent changes have led several experts to warn that the city’s condo sector is now running headlong into a watershed.
“The condo market has peaked. Sales velocity has slowed down considerably,” Miami-based real estate development lawyer Neisden Kasdin said.
The South Florida real estate market has exhibited remarkable sensitivity to global trends over the past few years, due in no small part to an unremitting dependence on foreign capital to prop up the sector. A recent dearth of overseas investors might upend the current situation, however—and this is not a contingency that even active Canadian buyers can help with, observers said.