They say when Latin America sneezes, Miami catches a cold, as it were. Yet, recent reports show that Miami has really caught an economic cold literally after Brazilian real estate dropped last 2015.
It can hardly be imagined Miami having recession yet after several years of maintaining its economic growth, 2016 might be the year for the city's economy to slow down, Miami Herald reports.
That being said triggers the idea that Miami, specifically South Florida's real estate will also be affected this year.
According to Frank Knight, an American economist, 2016 would be the year when luxury housing prices in major global cities will slow down from 4 percent to 1.7 percent. He also pointed out via Prestige Estate Properties that this change in the luxury sales are affected by the instability of the global market, economic slowdown in Latin America and China, the increasing interest rates in the U.S., as well as the power of dollar against other foreign currencies.
"I've seen this maybe three times [before] where we completely lost the Latin American consumer due to the strength of the dollar. If the dollar is strong, they're not going to come here and spend unless they're super-wealthy," said Jose Goyanes, a businessman and a board member of the Downtown Development Authority.
So, this 2016, businesses should not expect too much from the foreigners who are spending money in Miami, as per Miami Herald.
Prestige Estate Properties features this turbulent market state as one of the factors that would keep foreign high-net worth individuals skittish throughout 2016 as due to global political instability, more buyers will be sent to the U.S. And even though the U.S. will have an economic slowdown, at least it will not be the least negatively impacted, which is beneficial for New York and Miami. South Florida is even dubbed as the "safe zone" for HNWI who want to escape from their native land's economic turmoil.
Aware of the decline of the real estate this year, not to mention the economic turmoil throughout Latin America, HNW buyers will be drawn to Miami in the hope of finding security and stability this 2016. In fact, South Florida's real estate will remain to be a better place for people to invest in than the other global real estate markets.
After all, the U.S. is still banking on what it can offer -- citizenship, economic and educational opportunities, to draw in foreign would-be U.S. investors. This moves most to remain optimistic about the luxury real estate in South Florida.
