Wealthy Chinese Investors Turn their Attention to Miami Real Estate
July 2, 2015Wealthy Chinese are the latest group of foreign buyers entering Miami’s luxury real estate market. Traditionally, Latin Americans have flocked to Miami along with Northeasterners to snatch up luxury properties as both winter and permanent residences. Traditionally, New York, Los Angeles and San Francisco have been the major destination cities for Chinese expats. For foreign buyers, purchasing properties in Miami has become a way to protect capital from the turbulent forces of the global markets and political instability. This U.S. luxury real estate market is viewed as a stable investment. Now due to a number of factors, wealthy Chinese are turning their attention to Miami.
As of 2014, the Chinese represent 2% of all international buyers in Miami, that’s up from 1% in 2012. At a 50% increase, they represent the fastest growing foreign buyer in Miami. China’s rigid education system, government crackdowns, pollution and a weak economy are the major forces driving wealthy Chinese to purchase real estate in the U.S. In 2010, 772 Chinese received investor green cards, and in 2012, the number increased to 6124. These green cards are reserved for foreigners who invest $1 million of more in U.S. based businesses. And it’s not just China’s elite moving to the U.S. either, China’s professional class, who are experiencing a decline in their standard of living due to a weak economy and low wages, are right behind them. Approximately, 81,784 Chinese received permanent residency in the U.S. in 2012.
Miami’s emerging significance for East Asian commerce is another factor driving interest in the area among Chinese. The Port of Miami is being expanded to a 50 feet depth. This expansion will be able to accommodate the next generation of cargo ships at 12,600 TEUs. As a result, South Florida’s strategic impact in the world of international trade just grew exponentially. Miami already has a large international port and is a major exporter and importer of goods. At this time, this gateway to the Americas will be the only city south of Herndon, Virginia with a port large enough for the newly expanded containers. The port will become a major shipping hub for East Asian goods. This development will have a major impact on the local economy, as well as Miami’s overall global significance. As an increasing number of wealthy Chinese move to Miami for business purposes, the ripple effect will have a positive impact on the luxury real estate market.
One of the major factors preventing more Chinese from moving to Miami is the lack of a direct flight from China to Miami. Once a direct flight is established, it is expected that there will be a substantial increase in the number of Chinese acquiring property in to Miami. It is a trend to watch for in the next few years. For real estate, it means another source of all-cash buyers are entering the market. An equity based real estate market safeguards the market from vulnerability to potentially volatile market conditions. Overall, the movement of wealthy Chinese into Miami’s luxury real estate market is a very positive development. This latest development reinforces Miami’s growing global significance among high net worth individuals.
