In a city that is only just in its recovery phase. It made interesting reading to find that a new record was set this month. A wealthy investor paid a cool $34 million for a Miami beach apartment.
(PRWEB UK) 27 March 2013
Loxley McKenzie, Managing Director of Colordarcy commented, “In a city that is only just in its recovery phase. It made interesting reading to find that a new record was set this month. A wealthy investor paid a cool $34 million for a pair of Miami beach apartments and whoever it was, actually bought them off-plan. (Source: Wall St Journal, March 7th.)
Miami is one of those cities that has a natural advantage. It has its beach, its close associations with Latin America and, at the moment, its historically low property prices.
Miami was also one of the cities that felt the pain most in the US housing crisis and is among those that are coming back strongly according to Colordarcy analysts.
In 2012, property prices in Phoenix rose 23%, in San Francisco 14.4%, nearly 13% and in Miami and Los Angeles, 10%. (Source: Zillow data).
There are signs that the spectacular growth in property prices is underpinned by some sound economic numbers.
Miami’s development officials have been working hard to attract companies into Miami from the US and South America. There are signs their hard work is paying off with unemployment down to 9.1% in the city in December from the 13.3% it was in August 2010. (Source: State Statistics)
South American property developers are also moving in to build homes for the growing number of people from their own countries who see Miami property as a sound investment and something of a status symbol.
Wealthy Brazilians and Venezuelans have been part of the reason why Miami property prices have recovered to the point where the city once again offers a real return on investment.
Low mortgage rates mean that buyers can afford a home that is 34% more expensive than in 2008 (Source: Bloomberg) and if they stay this low home prices could potentially rocket within the next two years.
One thing that may slow things is that the local population would have been forced to take on additional credit when times were tough post – 2008 and this will still be working its way through.
Many people will still find it hard to raise finance for property even at these low rates. However this is not necessarily bad news for investors in Miami property say Colordarcy analysts, considering that these people also need a place to rent.
The ongoing difficulties in raising finance to buy property means that cash investors are able to benefit not only from capital growth but also rising rents. The median rental rate for a residential property in South Florida increased by 4 per cent year-on-year basis to $1.22 per square foot in 2012 compared $1.17 per square foot in 2011.
This brings the best of both worlds in Miami, property that pays for itself with high tenant demand. So even if an investor does not have $34 million to spend, Miami still offers some of the best real estate returns in the world this year.
Notes to the editor:
Colordarcy is a leading property investment company that specialises in finding positive cash flow investment properties worldwide. Colordarcy investment property portfolio includes some of the best properties for sale in Brazil, Florida, Turkey and the United Kingdom.
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