The growth in the real estate market in Miami is due to the sudden increase in the investment of foreign capital in the market, market experts believe. If you think that most of this money comes from rich industrialists and investment firms abroad, you will be wrong. Most of these are investments by foreign nationals living in South Florida and Miami. The three main reasons for the growth of foreign investment in Florida are:
1. Prices lower than elsewhere
Prices of property in Miami Beach are slowly on the rise. Most of the new condos coming up are targeted at the rich buyers and hence the prices are very steep to help the developers cover their losses after the economic down-slide. These expensive Miami condos are not cheap with very steep price tags but, in spite of that the number of sales is on the rise. The foreign nationals are not shying away from buying these expensive properties because they fear that the price will rise further and also because the price of property in their home country is higher. Therefore, unlike the US citizen they donâ€™t feel the steep prices since they compare it to the prices in their home country.
2. As a means to securing their savings
It is easy to find any Miami Beach realtor who feels that the main reason for the increase in foreign investment is not because the market has completely recovered but because it is in a better shape than other markets and foreign nationals feel it is the safest place for them to invest their savings.
The largest investment comes from nationals of Argentina and there is a reason for this. The Argentine President, Kirchner, has stopped outflow of capital from Argentina to foreign shores to help their own economy grow, but since the economy has not grown for a decade, the rich and wealthy in Argentina feel that investing in a property in Miami is a better way to ensure a good return on their investment.
3. Low Interest Rates
With the Federal Reserve keeping the interest rates low to attract foreign investors, investors and developers from Germany, Argentina, Japan and China are coming to invest in the real estate market of Miami. These foreign investors feel that the US economy that is recovering is a safe market for their investment. Moreover, investing in projects in Miami where the real estate market is going through a boom, they will be able to gain more profit than in investing in their own countries.
With property prices cheaper than their home country and the low interest rates, foreign investors are coming out to invest in the real estate market of Miami and to benefit form the market boom.
Author: Brenda Lyttle.