Yet again Florida ranks as the top state for international buyers. One of four foreigners buying US property chose the Sunshine State. Apartments were the preferred type of Florida property for the international investor.
The latest Profile of International Home Buyers in Florida compiled by the National Association of Realtors (NAR) finds that 25 per cent of all purchases of property in the US by foreigners took place in Florida. Although the number of sales is down on last year, the volume has rocketed to reach its highest level since 2005.
Fewer units, higher volume
In total, foreigners spent US$23.7 billion on Florida property last year, nearly a quarter of the entire market volume and 5 per cent higher than last year. The volume spent by international investors from July 2014 to June this year is the highest in the 10-year history of the Profile. It’s also considerably above the previous record of US$17.4 billion set in 2012.
Although they spent more on Florida property, foreigners bought fewer units. The 44,000 properties purchased over the 12-month period represent a market share in the state of 12 per cent. This is down from last year’s 15 per cent, but three times higher than the national average of 4 per cent.
NAR commentators attribute this fall, the lowest since 2005, to several factors. Probably the most significant is the improving economy bringing with it the return of the domestic buyer to the US property market. Additional reasons are believed to be the rising prices of property in Florida – up by around 6 per cent in the period covered by the Profile – and the strength of the US dollar.
However, the average price of Florida property bought by foreigners reached US$538,600, a massive hike on the previous survey’s average (US$300,600). The amount spent by international investors was also considerably higher than the state average of US$258,200. 63 per cent of international buyers said property in Florida is cheaper than in their home country.
Reasons for buying Florida property
The NAR Profile finds that the security and profitability are the main motivation behind investing in the Sunshine State. “The security and profitability of investing in Florida property, cited by 51 per cent, is consistent with the findings of this and past surveys that show majority of buyers are purchasing property for rental purposes,” says the report.
Location represents another deciding factor with 41 per cent claiming that Florida’s desirable location was the deal clincher for them. Just over a quarter said they planned to use their property in Florida for holiday purposes while 24 per cent bought for rental purposes.
Who buys Florida property
The latest NAR Profile shows a shift in the nationality of international buyers in Florida. Latin American buyers dominated purchases to reach 56 per cent of the total share, well over double the 23 per cent share in the previous survey. Buyers in Florida from Europe amounted to 19 per cent of all international investors.
Venezuelans were the largest international group with 18 per cent (up from 3 per cent) followed by Canadians whose 11 per cent market share is well below their previous 32 per cent. Analysts attribute these oscillations to political instability in Venezuela and the weak exchange rate for the Canadian dollar.
Where and what did they buy
Miami and Miami Beach were overwhelmingly the preferred locations for Florida property among international buyers. These areas accounted for 36 per cent of all sales. The next most popular was Fort Lauderdale. Central city districts (47 per cent) followed by suburban areas (30 per cent) dominated the general location list. Broadly speaking, Latin American buyers opt for property on Florida’s east coast while those from Europe and Canada tend to buy in central and western Florida.
Since the majority of foreigners buy for rental purposes, it follows that condo properties in Florida are the most popular investment choice. They account for 45 per cent of the share. Single family homes – more popular for international clients buying for holiday use – make up 38 per cent of all purchases.
Source: National Association of Realtors