A recently issued report on the significance of international buyers to the Florida real estate market makes some fascinating points (at least, fascinating to those people involved in the market and maybe those planning to buy).
Based on the past five years’ sales, the report forecasts a demand of more than 20,000 properties over each of the next three years from foreign buyers. There are some notable points that it brings out, for example:
The top international purchasers of Florida homes come from Canada, the U.K., Venezuela, Brazil, Argentina, Germany, China, Colombia, France, Peru, and Italy. Purchasers from Venezuela, Brazil, ArgentinaChina, Colombia, and Peru have generally been increasing since 2008. Substantial decreases are reported for the U.K, and moderate decreases from Germany have occurred in that span.
With a recent increase in the strength of the UK currency (it reached a 5-year high today), will interest from that country increase?
For the 2012-13 report, Canada was responsible for the most sales to a single country in the Orlando-Kissimmee area, followed by Brazil at 17 percent. Next-highest was the U.K. at 10 percent, then there was a significant drop-off in percentages, down to 3 percent for Colombia and Iceland.
The prominence of Canadian buyers certainly matches our anecdotal experience. During some parts of the year, there seem to be almost as many Canadian vehicle tags as there are US one! The question is whether the US Dollar, now stronger against the Canadian currency, will change that trend.
Reflecting perhaps the more onerous and regulation-driven attitude of US lenders in comparison with the business climate just a few short year ago, the report also identifies that:
A majority of these purchases were cash transactions at a time when credit was difficult to come by for many Floridians, and others around the globe.
Cash buyers probably recognize the cost benefits of this approach, with the likelihood of lower Closing Costs and more advantageous interest rates in their home countries, in comparison to raising a loan in the US.
There is more to read – you can find the whole report at this link.