While Russian buyers are fleeing Sunny Isles Beach, investors from New York and Los Angeles are flocking to Miami to buy luxury homes, according to a group of brokers who participated in a panel discussion during The Real Deal’s Annual Real Estate Forum and Showcase in the Design District’s Moore Building.
“Russians have disappeared from Sunny Isles,” said Craig Studnicky, principal of International Sales Group. “Right around the time the United States imposed economic sanctions on Russia over its actions in the Ukraine, Russian sales dropped off the cliff.”
As a result of the sanctions, the Russian stock market has dropped 25 percent since February, Studnicky said. “They can’t do anything,” he said. “They are frozen.”
Nevertheless, Miami is attracting a large number of domestic buyers from New York and Los Angeles, as well as continued interest from South American buyers, said Alicia Cervera, managing partner of Cervera Real Estate. “I think Mexicans have discovered Miami in a big way too,” she said.
Nelson Gonzalez, a senior vice president with EWM Realtors specializing in ultra-luxury homes, said high net worth individuals from California and New York are fueling the demand for new mansions in Miami Beach. “They can spend $20 million on a house because they are making $30 million a year,” he said, referring to the favorable tax set up in South Florida. “The house practically pays for itself and they get to live in paradise.”
He added that big city hedge fund managers are also relocating their businesses to Miami to take advantage of Florida’s favorable tax status, which means their employees are also looking to buy in Miami.
Jay Parker, chief executive of Douglas Elliman Florida, says he believes Miami will begin to see an influx of Chinese buyers in the coming year.
“There is significant interest from China to get into Miami,” he said. “Once it starts, it will be quite robust and opportunistic.”
Studnicky agreed, noting that the opening of the expanded Panama Canal next year is expected to increase trade from China to PortMiami. “Miami is going to become a trade hub that will account for new ships coming in from Asia,” he said.