Mexicans replacing South Americans as buyers of South Florida's luxury condos
By Frank Norton
While South American demand for luxury condos in South Florida has tempered because of waning flight capital from that region, the richest of the rich and an emerging class of Mexican buyers are propping up demand, real estate watchers say.
"With respect to flight capital I think we've already seen most of it," said Gregory Rumpel, senior vice president with Jones Lang LaSalle Hotels in Miami.
"Some of those that were in the market for condos have vanished, but the very high-end market is still reasonably active," he said. "I suspect these buyers are people with diversified and dollar-based assets."
Local real estate expert Michael Cannon agrees, saying the "super" wealthy already have US accounts and dollar-based assets and are therefore insulated from the massive currency devaluations seen in Venezuela, Argentina, Brazil and to a lesser extent Colombia. But Mr. Cannon also repeated estimates that South America still accounts for as much as 50% of total for luxury space in certain parts of Miami-Dade County.
The strongest demand for luxury units in the county remains waterfront properties near Brickell Avenue, and in Sunny Isles Beach and Aventura, real estate agents said. And that goes for both South Americans and Mexicans.
According to market analysts, Mexican demand for luxury condos has risen counter-commensurate with the slight fall off in South American demand, hampered by currency devaluation and the lack of wealth creation across the region.
Wealthy Mexican buyers are increasingly taking hold of waterfront property in Greater Miami, analysts said, spurred not by calamity at home but by relative prosperity and a strengthening in their underlying consumer power.
"The new wave from Latin America is without a doubt is the Mexicans. It's incredible how many are coming - from the very rich buying expensive units to the others buying not so pricey," said Alicia Cervera, president of Cervera Real Estate, which has been locating wealthy South Americans in Miami-Dade County for 30 years.
She said extremely wealthy South Americans continue to buy luxury waterfront condominiums, although they being outpaced by upper-middle-class Mexican buyers looking put their money into a second home.
"Many come to Miami to wet their feet, buy a small apartment and sell it in a couple of years," she said. "When they realize they have made a profit, they don't fear reinvesting in a larger, more comfortable place. Some keep the first apartment as a rental and others become developers."
According to Mr. Rumpel, "the Mexican market is doing well because of its growing middle and upper classes and the fact that its economy has been largely unaffected by woes in the rest of Latin America."
As long as interest rates and stock market values remain low, Latin American and foreign demand will continue, said Raul Valdes-Fauli, senior vice president of lending at Colonial Bank.
"A CD is not an attractive option, the stock market is not an attractive option and things back home are precarious at best," he said. "By comparison owning a condo on the beach is a safe haven for your money for a few years.
"If you can tap into the right brokers and networks in Latin America, you'll still find that there is a lot of business to be found there. But you really have to network now. They're not going to just show up at your door anymore."