Greetings from sunny and hot Miami Beach! We have been traveling on business this summer to reach foreign buyers who are coming to Miami. While we were in Germany recently, Brexit hit! Everyone is asking us what Brexit means for Miami real estate, so we will give our thoughts on the matter here.
Basically, we are hearing 2 possible scenarios. (1) London is now less expensive because of slashed asking prices and the severe depreciation of the Pound, so people will buy MORE real estate there. (2) People will fear the long-term implications and stop/slow investing in London and move those funds to “safer-haven” cities and countries such as New York, Miami, Germany, etc…
Scenario #1 remains to be seen, but the current trend is the opposite. The Real Deal just reported on 4 more UK Property Funds that have suspended trading amid the Brexit fallout Real Deal July 8 UK Property Funds Suspend Trading. Most recently, it is being reported that United Overseas Bank in Singapore (3rdLargest), has stopped lending on properties in London. A spokesperson said, “As the aftermath of the UK referendum is still unfolding and given the uncertainties, we need to ensure our customers are cautious with their London property investments.” Guardian June 30 Banks Halt Lending. Time will tell if investors and lenders will feel comfortable with London again, or will this open their eyes to other possibly safer havens?
Scenario #2 would benefit Miami and a handful of other cities. Buyers have always been drawn to Miami for its weather, water and lifestyle, and the result is we are now a city with a tremendous amount of foreign investment. As prices drop heavily in the London real estate market, experts anticipate a South Florida boom from foreign buyers who are specifically looking for real estate security and stability Local 10 June 29 Brexit Could Mean Big Boom for Miami. Additionally, although we are a world-class gateway city, prices are still significantly lower per square foot than in places like New York, Monaco, London or Hong Kong. Regardless, present uncertainties in Europe will certainly trigger an initial immigration of educated and wealthy investors.
Direct flights from abroad to Miami are becoming more prevalent from cities such as Germany and Istanbul for example, and soon-to-be direct flights from China. Brexit may help spur buyers from around the world to check out Miami for world-class dining, beaches, culture and real-estate development.