The death of Hugo Chavez, longtime president of Venezuela, has raised some concerns worldwide. In Florida, it has raised apprehension about how his demise could affect its real estate market.
Experts believe that Venezuelans were major market boosters for Florida's real estate. In a 2012 survey, it was observed that most of the real estate market surge in Miami came due to increased sales in rental and vacation properties largely purchased by Venezuelans. Even though the lending market was tight, 69 percent of the Venezuelans paid in cash, full!
"They made a huge contribution to the strength of the market here. I used to joke and say, 'everyone hates Chavez, but I love him.'" Jonathan Lief, a broker in Miami said to CNN Money.
According to CNN, experts are worried as they think that the Venezuelans might return to their homeland. With a new round of elections around the corner, brokers of Florida believe that the Venezuelans will wait and watch the business environment of their homeland, and return if they are favorable. They might even lose interest in the realty market of Miami.
Chavez had earned immense notoriety for his social and economic policies. When he was first elected president, more than 200,000 Venezuelans migrated to the U.S., doubling their population in the country. Most of the populace was concentrated in Miami, Florida.
The mass Venezuelan departure was led by private sector players and entrepreneurs. With the rise in taxes and incessant government involvement in the private sector, businessmen took their trades elsewhere. The rich had a lot of money but no place to invest. Luckily, the depressed Miami real estate market came to their rescue.
Currently, Miami's housing market is flourishing. It is one of the most prosperous cities to invest in. In the fourth quarter report, sales in Miami jumped 14 percent on a year-over-year basis. The bay-city also ranks #13 on Knight Frank's "Most Expensive Places to Buy Luxury Residential properties" 2012 Wealth Report.
According to ABC News, Chavez's death would not only impinge on the Florida realty market but would also affect economies of the countries that he was most friendly with. Cuba, Argentina, Bolivia and other Caribbean nations were benefited largely by his oil subsidies.
This was one of the reasons for Venezuela's strained relations with the U.S. The ties that Chavez established with Cuba and Iran angered many U.S. presidents. The two countries have not exchanges ambassadors since 2010.
