Luxury homes in Florida in the form of Skyscraper condos are a hit among ultra-rich buyers who like designer labels such as Porsche, Giorgio Armani and Fendi, reports The Associated Press.
It is not just because of the beachfront feature of these hotels, offering an amazing view of the Atlantic Ocean, that sells these days. Rather, the megarich value their homes like how they value other luxury items like cars, bags and jewelry, says the outlet.
What's in a Name?
The notion basically comes from other countries like Europe, Asia, and the Middle East Countries, reports AP. They have already known this fact some time ago: "Luxury-branded hotels and homes could command huge premiums" that the rich would willingly and gladly pay for. Yes, it's all in the branding.
Other Reasons
The rich may be consistenly looking for other places to go for other reasons as well. Currently, Miami is reportedly attracting wealthy Argentinians, Brazilians, Chinese, Russians and French, AP notes. Why do they search for other havens?
The same AP report reveals that some of them wanted refuge from "political instability" and higher taxes imposed in their countries.
With the strong dollar, owning a property in the United States would protect the assets from depreciating. With the weakening of their currency, the mighty dollar is their best bet.
Owning properties in Russia for investment is not profitable this time due to the weak ruble, says The Wall Street Journal. Europeans are also less likely to buy properties in their homeland with euro's very poor showing, based on a recent report of Business Recorder.
New Development in Miami
A new development is on the rise in Miami showing how luxury sells fast, notes AP. The Porsche Design Tower in Sunny Isles, which is still under construction and would be completed by 2016, is reportedly almost sold-out, says its developer, Gil Dezer. The rich already paid or committed to pay for something they still do not have in their hands, so to speak.
The unique point of the 60-story-building is that it would have three car elevators, with each able to transport a condo owner's car and slide it into the owner's personal garage, above ground.
Other Branded Hotels
The developer is also taking reservations now for other towers like the Armani Casa, says the outlet. Fendi Chateau, named after the Italian Fashion brand, is also reportedly being built by The Chateau Group.
Negative Effects
Although the construction of the buildings produced jobs across Miami, it also greatly impacted the home prices in the area.The emergence of these foreign buyers resulted in a tremendous 66 percent increase for the top 5 percent of homes around Miami Beach in the past year, says Redfin, a real estate brokerage, as reported by AP.
Low-income and middle-income locals would just have to be content looking at these expensive beach properties and have to buy from farther areas, said Aaron Drucker, managing Director for Redfin.
"Locals are not really part of the party," Drucker said. "It's a little bittersweet for folks who aren't going to be able to enjoy the beauty of Miami."
Basing on Realtor.com's First Mortgage Affordability report, showing Miami landing on the 5th least affordable area in the 25 largest housing markets surveyed in 2014, Miami locals may not easily catch up with these wealthy individuals.
