With the announcement of Brexit last week, the international community went into shock guessing the consequences of London exiting the EU. Panic set in early, but for South Florida, the exit may actually fair well for the real estate market here. As The Real Deal recently reported, Miami-Dade property values hit a record $251B in July. The surge in values does not appear to be slowing down either. It’s a “$5 billion increase in values since they last peaked before the crash in 2008.”
Demand is beginning to pick up from the foreign buyer cool off. What we’re seeing right now is a very fickle market when it comes to international buyers. Some are looking to exit their home countries for more stable markets abroad. While others want to sell off foreign investments and localize due to currency valuations. There’s push-pull between retreating to native countries and seeking to expand abroad. For HNWIs, owning property in South Florida becomes an insurance policy.
Florida remains one of the most valuable real estate markets in the world. This means exodus from Britain may more stir interest in both Miami and New York real estate. All the gateways cities are expected to see a surge in interest as buyers look for alternatives to London with its now-uncertain fate. In these turbulent market conditions, buyers want stable markets and secure locations. In comparison to other global gateway cities, South Florida continues to be considered one of the safest places to invest in terms of security, finance, political climate, and market conditions. There are few places in the world that can really trump South Florida’s safe haven status as well as its favorable tax policies.
It is expected that Miami’s population will grow by another 20,000 over the next few years. These new residents are expected to be wealthy and well-educated foreigners. The market is expected to absorb more Europeans moving to the city who will open businesses and work out of Miami. An influx of Europeans may also help compensate for the loss of South American buyers experienced this year due to economic troubles throughout the continent.
This trend suggests that despite the slowdown over the last few months, the tide may now shift again. Uncertainty about the future of the European Union motivates Europeans to look elsewhere. Miami's appeal continues to gain traction. London will likely continue to see a decline in its favored global position especially as its strategic importance to the international banking community weakens. As a gateway city, Miami is well positioned to benefit from the Brexit upset and that’s good news for the real estate market in South Florida.
Michelle Farber Ross