“Chinese buyers were not buying real estate in Miami five years ago,” said Knight Frank Global Head of Research Liam Bailey.
But now, they make up 4% of the foreign buyer pool, according to the most recent data published in 2018 from the National Association of Realtors.
Bailey compared info dating from 2018 to 2019 for the Wealth Report 2019, published in June. The data shows that more Europeans, Canadians and even Chinese buyers boosted sales activity.
“The broadening of buyers shopping for a primary residence in Miami strengthened the residential market between 2018 and 2019,” Bailey said. “Back in 2016 and 2017, the luxury residential market was weak. It’s now showing the beginnings of an improved market. Half of out-of town buyers are coming from the northeast, thanks to the tax changes.”
Tax flight influenced the market as early as November 2018 but remained a constant and increasing trend in 2019.
“They are buying because of the tax status,” said Dina Goldentayer, a Realtor at Douglas Elliman. “They may start their search by not wanting to pay New York municipal taxes, but they end up buying a primary residence here because of the weather, culture and restaurants.”
The other half of foreign or out-of-town buyers are almost evenly split between Latin America and other regions such as Europe, Canada and China. According to the National Association of Realtors, 48% of buyers are from Latin America, 20% from Canada and 12% from Brazil. The rest come from Colombia, Venezuela, Argentina, the United Kingdom, Chile, Dominican Republic and Germany.
“Even though more Chinese buyers are investing in Miami they are still not calling the Magic City home,” said OneWorld Properties President and CEO Peggy Olin. “Chinese buy primary residences in Los Angeles and New York.”
Her downtown Miami-based luxury brokerage firm has an office in Beijing, Shanghai and are establishing another in Shenzhen.
“The plan is to “sell South Florida to the Chinese,” Olin said. “They are looking for a place to put their money and rent.”
Her team sold about 20% of the total 225 units in the hotel/condo tower YotelPad Miami to Chinese investors starting in May 2018. The building sold out 11 months later.
Thus far, after starting sales for Paramount Miami Worldcenter in mid-2017, OneProperties sold 80 units to Chinese investors. Of a total 570 units, 75 units remain.
“Often times, investors look to buy two to three condo units, each under $1 million,” Olin said. “They look for units in buildings that are likely to grow in appreciation and will, at the very least, provide a small return. As long-term investors, current buyers are expected to remain in the market and investment from China will continue to grow.”
Still, not all Realtors are seeing as many, if any, buyers from China. Miami Master Brokers Forum Chairman Jeff Morr saw some investors from China in the last few years.
“Investors are buying because they see value in Miami real estate, growth in the market and business opportunities are driving them here,” Morr said.
“I did not see a single Chinese investor in 2019,” said Goldentayer, who primarily sells real estate in Miami Beach. “But, there are more Europeans buying homes in the area.”
Source: Miami Herald