Brazilian Investors Reaping The Benefits Of Miami Real Estate Market
Recently, during one evening in Porto Alegre, Brazil, people gathered at a cultural center known as Instituto Ling to listen to a pitch from Alan Araujo. As the Director of International Sales at One Sotheby’s in Miami, Araujo was speaking to high net worth investors and their families about the condo units at two special projects in Miami; The One Thousand Museum by Zaha Hadid Architects and The Lower House.
Araujo believes that most of his audience is looking at purchasing a condo because they want to get their capital out of Brazil. Araujo notes that there is a lot of money in Brazil, but people want to protect their finances, so they are looking for a way out. While Brazil’s inconsistent economy does look to be on the path toward recovery, many Miami condo real estate analysts believe that a resurgence is taking place among Latin American residents.
One measure of economic output is real growth domestic product. While the data is adjusted for inflationary and deflationary pressures, Brazil’s figures have been declining. However, gross domestic product in Brazil is expected to make a comeback in the future. The data is trending upward.
The World Bank Group recently released a report based on what the data can help infer about global economic prospects. Throughout Brazil, employment continues to rise, which damages financial conditions. There are also continued political issues that have led to a decline in investment and private consumption. As growth picks up, The World Bank Group officials expect regional recovery to gain momentum. There have been reforms implemented throughout Brazil and Argentina over the last few years to help stabilize government finances. Investors should start receiving dividends, and the business climate in Latin America will improve.
Over the last few years, thousands of properties have been purchased by foreign buyers in the Miami area. The combined worth of the properties is over a billion dollars. The National Association of Realtors reports that buyers from Venezuela, Brazil, Colombia, and Canada make up a large portion of that volume.
The Future Of Brazilian Wealth
While Brazilians make up a large portion of Latin American millionaires, One Thousand Museum co-developer Louis Birdman did not see a single Brazilian prospect. Now there are over 200 interested Brazilians that are looking to market units at the condo tower overlooking Museum Park. Birdman believes that the value of the Brazilian currency drops in comparison to American currency. Investors will look at dollar denominated assets such as South Florida Real Estate. Once the United States overcame the Great Recession, the exchange rate between the two currencies became a little more even. However, the Brazilian economy took a nose dive and caused inflation. The gap in the exchange rate widened. A large percentage of One Thousand Museum buyers have been from Latin America. The number of domestic buyers has risen slightly since the tower delivers. Birdman notes that Americans typically prefer to see a finished product before purchasing. As the economy in Latin America improves, Miami will become a natural target for people to buy condos.
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Impact Of Immigrants
According to FB Captial CEO Fernando Bergallo, the primary difference between the rise of Brazilians heading to South Florida today and the past is the fact that they are fleeing their home land. The economical and political tension makes it easy for people to want to move abroad. There is a lot of interest from Brazilians to purchase real estate primarily for their personal use instead of an investment. Buyers are purchasing cheaper condo projects. Buyers are hoping to secure visas that will allow them to stay in America and permanently escape the political drama in Brazil. Another factor for Brazilians wanting to leave their home land is the high murder rate.
Political consistency has been lacking since President Dilma Rouseff was removed by vote by the Brazilian Senate. The controversy has damaged an economic recovery that appeared to be coming soon. Brazilians are looking to rent their condos as a way to pay for property taxes, however this strategy is not really considered a money making scheme.
Latin American investors are also looking at commercial real estate investments. Investors are looking at gas stations, warehouses, and other types of retail properties.