If you’ve traveled anywhere in Europe or Latin America in the past few months, you’ve enjoyed the dollar’s strength against many foreign currencies—a departure from years past, when our bucks didn’t stretch far in cities like London, Paris, and Rio de Janeiro. The dollar still lags behind in regions like Great Britain, Japan and China, but virtually everywhere else in the world, U.S. currency is very strong.
So what does that mean for foreign buyers, who account for a substantial part of the Miami real estate market? If you look at market data comparing financial real estate data from 2015 and 2007, you get a sense of how changes in official foreign currency rates have affected prices for those buyers over time. For a Miami property costing $1 million, in January 2007 it would have cost a Russian buyer 26,571,900 rubles; in January 2015, it cost 70,060,000 rubles. That’s an increase of 163.7%. For an Argentinian buyer, the property got more expensive by 177.6%; for a Venezuelan buyer, the increase was 193.7%.
In the middle ground, for a European Union buyer, the price increased by 14.5%; for an English buyer, 30.1%; for a Brazilian buyer, it was 25.6%.
On the flip side, for buyers from Japan, China, and Peru, time brought a fiscal advantage: For those countries, the $1 million property got less expensive by 3.3%, 20.6%, and 6.6%, respectively.
When you compare the price fluctuations within a closer window, say, from January 2014 to January 2015, the changes are slightly less extreme, although the dollar has gained remarkable strength against the euro, the ruble, and the Colombian peso.
This could potentially translate to a temporary slowdown in deals with buyers from these countries, but the bottom line is that the top echelons of foreign buyers, just as they are domestically, are traditionally impervious to currency fluctuations when it comes to real estate. Plus, the Miami market is still desirable to the international consumer. With the growing strength of the yen and the yuan, it would be surprising to not see an increase in the number of Japanese and Chinese buyers looking to invest in U.S. real estate, offsetting any tapering off of the surge in Brazilian investors from the last few years.
Miami is a consistently hot ticket on the global scene: There will always be a foreign demand for our city’s world-class properties. If you want to talk more about how foreign currency rates create real estate opportunity, please get in touch.