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Miami Properties: Wealthy Latin Americans Shake the Miami Real Estate Market | United States


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Luxury oceanfront condos in Miami, Florida.Educational Images (Jeffrey Greenberg / Universal Imag)

Political upheavals in Latin America have led many of its wealthiest residents to withdraw their money from their countries – a trend exemplified by their luxury properties in Miami, Florida. Over the past year and a half, as the global economy suffered historic lows, Miami has experienced a boom in real estate purchases by Latin Americans. Real estate brokers and agents say this is unlike any wave of investing seen before. On this occasion, buyers transform their investment into their new permanent residence.

The incumbent presidents and their replacement candidates have sowed fear among the wealthy elites of Latin America. In Mexico, President Andrés Manuel López Obrador has alienated large companies and wants to cancel contracts with private companies. In Peru, President Pedro Castillo sacked the most radical elements of his government under pressure from the markets. In Chile, a new constitution is being drafted at the same time that a left-wing presidential candidate, Gabriel Boric, leads current polls. In Colombia, Iván Duque’s government has been the subject of long and bloody protests, paving the way for left-wing candidate Gustavo Petro to challenge him for the presidency.

Capital outflows from the region are difficult to measure, but they are evident day to day. Currencies have depreciated over the past year, some more than others. Several investment banks have decided to go out of business and foreign banks have been inundated with requests to open accounts abroad. For many people, the easiest way to move their assets overseas is to invest in real estate, and in Florida, 34% of foreign real estate purchases come from Latin America, according to the National Association of Realtors ( NAR).

“We are currently witnessing a very significant resurgence of the Latin American market,” says Sergio Pintos, sales manager at Waldorf Astoria Hotels & Resorts in Miami. Colombia, Peru and Ecuador are the three biggest markets for Pintos and his team: 16% of purchases at their 100-story flagship hotel in Miami were made by Mexicans. “Due to the economic and political issues in each particular country, people are expanding and diversifying their investments and they are looking to bring some of those investments to Miami. Among these investments is real estate, ”adds Pintos.

The coronavirus pandemic has exposed the weaknesses of Latin America. On the one hand, the confinements have highlighted the informal and precarious nature in which a large part of the population lives. Public health systems have caved in under pressure from Covid-19 admissions and the slowness with which governments have seized on vaccine stocks has revealed their weak capacity for cooperation and lack of leverage on the international stage.

On the other hand, the poor living conditions of many have reached boiling point. In Brazil, Peru, Chile and Colombia, huge protests were fueled by poverty and inequality, causing a disruption of the political landscape with the rise of polarizing, radical and in some cases authoritarian personalities, generating uncertainty and mistrust. among the richest layers. of the society.

Investment and residence

“Miami is benefiting from the decentralization caused by the pandemic and this has acted as a catalyst for one of the biggest increases in Latin American immigration to the city,” said Yamal Yidios, founder and CEO of the real estate company. Ytech. “What I see is that what interests Latin Americans has shifted from investing and having a second home in Miami to living and working here.”

In many cases, Yidios explains, Latin Americans who traveled to Miami during the pandemic to get vaccinated have found they can work remotely. According to a report by the real estate company International Sales Group, Florida welcomed 950 new residents per day in 2020, both from the United States and overseas, drawn by the climate and the state’s low tax rates. “The city has grown from a financial district and vacation destination to one of the most important centers of technology, business and innovation that Latin Americans of all socio-economic levels want. to be. “

Chile and Colombia

Pintos and Yidios agree that there is a new market that is growing rapidly: Chile. “Chileans, because of their culture, traditionally invest in Chile. Today, although it is not a major player, there is an increase in the number of Chileans looking to buy, ”explains Pintos. Over the past two months, he adds, he has had talks with Chilean real estate agents seeking to specialize in selling Miami properties from Chile.

“What the Chilean buyers have told me is that this is fundamentally a political issue,” Pintos says. “Because they think there could be a drastic change in the economy from next year, based on political factors. This is the reality.” In addition, he adds, the Colombian market, which over the past decade has not been among the strongest, has returned significantly over the past 12 months, driven by social and political concerns.

The rise of cryptocurrencies

The use of cryptocurrencies has become so common that people are already buying properties this way, said Merrick Theobald, spokesperson and vice president of marketing for bitcoin payment service provider BitPay. Through online platforms such as condos.com, many Latin Americans make real estate purchases with cryptocurrency. “When the value of their cryptocurrency rises, people like to use their profits to buy something, usually luxury items or goods. They buy jewelry, a car, but also residences, ”explains Theobald.

“We are witnessing, especially this year, an increase in transactions from Latin American countries,” he adds. “It is a region with many bitcoin holders and showing growing confidence in bitcoin due to its decentralized nature, something people prefer over authorities.”

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