International investors play big role in S. Florida's housing boom

Results of a first-ever study on international real estate buyers in Florida confirms what real estate agents and residents have observed for years foreigners are big players in the state's real estate boom.

Foreign investors made up 30.4 percent of sales in Miami-Dade and Broward counties combined, while international buyers accounted for 5.8 percent of sales in Palm Beach County. Statewide, foreign buyers made up 15 percent of the state's total home sales. The study conducted jointly between the National Association of Realtors and the Florida Association of Realtors, looked at both single-family and condominium sales for 12 months ending in May.

For years, there had been only anecdotal evidence of foreign buyers playing a major role in Florida's booming real estate market. Earlier this year, real estate consultant Dabby Group Advisors said foreign buyers had invested an estimated $4.5 billion in residential real estate throughout South Florida.

The study released Thursday surveyed 986 Realtors across the state and analyzed 1,844 home sales transactions to non-U.S. buyers. A majority of realty agents surveyed -- 87 percent -- said at least one transaction in the last year involved a foreign buyer.

When it came to prices, the study showed that 27 percent of foreign buyers statewide opted for real estate in the $200,000 to $300,000 range. Homes priced for more than $500,000 was the next most active market at 22 percent.

Purchases were split between investments and vacation homes. About 17 percent of international buyers said they planned to live in the homes while traveling on business. More than a third of foreign buyers, or 36 percent, paid cash for their homes, compared to only 10 percent of all Florida homebuyers.

International buyers originated from more than 100 countries, but Europeans made up the majority of foreign buyers. Among Europeans, buyers from the United Kingdom outnumbered all others, followed by Germany, Venezuela and Canada. The study notes that the number of Venezuelan investors is impressive because the country's population is smaller than others.

Reasons for buying Florida real estate varied from wanting a vacation home, an investment property or a permanent residence in a country with political and economic stability. Low interest rates, cheap airfares, and favorable currency exchanges, especially for those buying with Euros, have made purchasing easier. While some countries limit the amount of foreign investment in real estate, the United States does not. And international buyers say they can get more house for the money in Florida than back home.

In South Florida, foreign investors have been drawn to condominiums near the water, real estate agents say. Marta Dupree, a realty agent with the Keyes Co. in Coral Springs, said foreign investors have not been as interested in suburban homes, but gravitate toward the east.

International investors ask us more for vacation homes and they say weather and the water are very appealing, Dupree said.

But in Weston, where Venezuelan investors have been active for years, international buyers also are coming from other parts of Latin America. Some are looking for investment, but many want stability.

It's not our hot real estate market, it's the instability of their country that drawing people, said Nuvia Sutton, manager of the Century 21 AAA office in Weston. Those who have already been here are beginning to invest in other parts of Florida, such as the Ocala area and northern Florida.

By Alexandra Navarro Clifton
Business Writer
Posted July 15 2005

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