High net worth investors of luxury real estate know that the condo market in Miami Beach has produced high supply for years. But now, thanks to an influx in Turkish buyers, the Miami luxury real estate market is poised to attract much-needed demand.
Qualified Foreign Investors: A Sight for Sore Eyes
The longtime retreat for residents of the Americas is now attracting a large expatriate population of wealthy Turkish buyers, who are snatching up properties in Miami-Dade County. A recent Wall Street Journal article stated that 5% of pre-construction inventory in Miami is now being sold to Turks. This was just the stimulus Miami luxury homes needed. In early 2016, the sales of homes and condos in South Florida began to abate amidst concerns of the large amounts of real estate inventory already in the pipeline combined with a dwindling number of foreign buyers (Source). The Sun Sentinel, a local news outlet likened the qualified foreign investors to the “backbone of the Miami-Dade market.” One of the reasons they were not purchasing in Q1 and Q2 of 2016 was due to concerns about worldwide economies.
Miami, Florida: A Turkish Delight
Now, following the Brexit decision (and declining real estate market in the UK) and the events of the failed Turkish coup attempt, Turkish nationals are seeking to diversify their portfolio in a market that is looking increasingly stable. These affluent newcomers already make up 10,000 part-time residents in Miami while an estimated 2000 Turks are already homeowners (Source).
Real estate prices are quite attractive compared to localities in Istanbul, the capital, or Bodrum a popular beachside city located on the Aegean Sea. Buyers are looking to purchase their third or fourth home. When they come to Miami, they have usually made a decision to buy. A large majority of Turkish buyers are interested in obtaining an EB-5 visa, which requires a down payment of $500,000 or more in real estate in order to be qualified as an Immigrant Investor. Once approved, Turkish nationals can acquire permanent residency in the United States of America.
Why Emigrate and Invest Now?
The steady trickle of Turkish immigrants has been noticeable for some time in Miami, so much so that a newly built consulate was completed earlier this year in Miami’s Brickell City Tower. In response, Turkish Airlines at Miami International Airport added a daily flight from MIA to Istanbul to service the influx passengers (Source). No doubt warming geopolitical relations between the U.S. and Turkey may have led to an opening up of borders between the two nations, but an unstable global climate has also incentivized Turk investors to seek stable real estate in a market they view as less volatile.
Instability in South America, Venezuela, Brazil, Russia, France, China (as well as Turkey itself) has made it attractive for many foreign HNWI to flock to the sunshine state. Miami offers the name recognition of other competing regions like London and New York City, but at a fraction of the price. Terrorist attacks throughout Europe as well as a devalued Lira, Turkey’s currency, have driven the trend.
Likewise, the climate is closer to the equator, making it fitter for Turkish nationals who are used to a warm, seaside, Mediterranean climate. In addition, many foreign citizens are purchasing homes or condos in downtown Miami, which is becoming more accessible to homeowners without a car – making it ideal for traveling business owners.
Big Players in the “305”
Turkish buyers are purchasing pre-constructed homes. Just recently, three units at the Ritz-Carlton Residences on Sunny Isles Beach sold to Turkish buyers, at about $4 million each (Source). An even bigger buyer paid $8.5 million for a two-story penthouse at Biscayne Beach (Source). Meanwhile, a historical boat repair yard on the Miami River known as Merrill-Stevens boatyard has been purchased by $7.69 million by Turkish billionaire Mustafa Rahmi Koc (Source).
Ready to Buy or Sell in Miami-Dade?
Westside Estate Agency has offices in Coral Gables, Miami. Give us a call at (305) 447-1471