Report: 90 Percent of Downtown Condo Buyers Are Foreigners

Categories: Unreal Estate

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It's not exactly a secret that Miami's latest unhinged condo boom is being fueled by foreign money, but the exact number of new residential units being bought in downtown by those from abroad is eye-popping.

According to a not-yet-released report from consulting firm Integra Realty Resources for the Miami Downtown Development Authority that was obtained early by the Wall Street Journal, "90 percent of the buyers of new residential units are from abroad."

See also: Miamians Can't Afford to Buy Condos in Miami

That means just 10 percent of buyers are Americans, and there's no telling yet exactly how few of those shiny new condos are being bought by actual Miami residents.

It's not much of a surprise, though, considering prices on new units are steep.

Prices for condos built during the 2003-to-2008 boom have increased about 75% over the past two years, to $400 a square foot from $230, the study found. Units currently under construction typically cost $450 to $550 a square foot. And those in projects that haven't yet broken ground are averaging $550 to $675 a square foot.

And Integra sees no sign that demand from those mostly South American, European, and Canadian buyers is slowing down.

Yes, Miami is an international hub, and it's no surprise there would be a lot of international rich owners who have condos here.

Yet it only emphasizes how Miami's rank-and-file residents continue to get screwed by the condo boom. Rising condo prices push all rents up. Developers are moving into once-affordable neighborhoods like Edgewater. The current market has also made it almost economically impossible for developers to consider constructing rental buildings and affordable housing. They're shying away from producing new office space as well.

"If you didn't get land before, you're not doing rentals," Carlos Melo, principal at the Melo Group, told the paper. "The rental market suffers a lot when there's this distortion in prices."

So basically Miami's urban core is turning into a place for rich foreigners to keep a Miami pied-à-terre. If you're a local resident or a business looking for office space, sorry.

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94 comments
Brad Beaty
Brad Beaty

That's why I moved to downtown Indy. A lot more affordable, and friendly! The only problem is all these pacer fans!

Kenneth Carrera
Kenneth Carrera

Again and again, why is this news??? Been known this. Since 10 years ago. Get some local writers and by local I mean they at least been in downtown before it was cool.

Jen Paez
Jen Paez

Because they are the only ones who can afford them.

Mark Erdman
Mark Erdman

On the plus side, come next market crash, there'll be tons of luxury condos for cheap

Wilfredo Sosa
Wilfredo Sosa

$$$$Too much money involved to stop this machine$$$$

Jose Sanchez
Jose Sanchez

Miami is beginning to show signs of a 3rd world country: locals unable to purchase properties, foreign investors come in, pick up properties, sustain local government and surrounding areas with their foreign dollars/investment

Adnarim Ed Yelsek
Adnarim Ed Yelsek

LMAO! Figures. Whatever. Like I say, they can keep downtown if they want it. It was all crack houses and prostitutes not too long ago.

frankd4
frankd4 topcommenter

......................actually the local corrupt politicians would never survive if residents in MIAMI could VOTE = period


imagine a core group of drug kingpins who park their money here in MIAMI, and pay cash premiums to developers for sight-unseen luxury condo units which funnel through as gigantic profits some of which gets kicked-back to those same politicians that allow the development AND reign in the police force from investigating the visitors and code enforcement from pursuing anything else shady and illegal


the drug industry get a place to park drug money - the politicians get greased from a constituency that does NOT vote - the developers get their profits guaranteed - the police department slides while looking the other way - code enforcement is a joke ................ and around it goes


and the MARIELITOs are carrying alligator attaches and snake-skin brief cases running the whole show

frankd4
frankd4 topcommenter

.............amd MOST if not ALL of those "foreign" buyers are drug king pins parking their stash of cash


FIRST OF ALL no legitimate person would agree to the current terms of sale WHEREBY the entire purchase price paid cash is at risk of being subordinated by the developer in the event of financial difficulty during construction = period


PLUS the local corrupt politicians support these drug industry people as do the corrupt police force give them the benefit of police protection and finally a plentiful hispanic-speaking day labor force is readily available here in MIAMI (compared to say NYC where a co-op board would demand their personal financial details, the NYC police department is the most sophisticated in the world at surveillance and investigation of the drug trade and their household help would be unionized - yikes !)


MIAMI is very welcoming indeed of international drug kingpins who could never live in NYC, or anywhere else for that matter, so unimpeded and free to pursue and enjoy their open and extravagant lifestyles here


debbie_78fr
debbie_78fr

Wow, and why you people did not buy it when it was still cheap? Because even then you were not able to afford it. Neither do I. There are goods for the regular people and there are goods for the rich.


You look like the people in France or in Spain complaining because the English buy the houses and make them pretty when the locals just see the houses lose their value... Many locations look great now and have a revival with this new comers.


Besides, if these "foreigners" would like to stay, they have the obligation to invest in the US (at least 500K$), create jobs for US natives (minimum 10), etc. Indeed, it would be better to keep these billions of currencies (Euros or whatever) in their original countries and create jobs there, but people are fleeing the wave of the crisis raised in the US (the Lehman Brothers scandals, the bloody sub-primes that put hundreds of thousands of American people out in the streets. That speaks to you?) to putting their money in a « supposed safer place ». Not all is money laundering -- banks have huge transparency policies (Sunshine Act, etc.)! Moreover, Europeans have huge savings, not credits like the US and Latin American countries where people are slaves of their credits. Everybody knows that. 


Another point is that if there are too much goods for rent, then the prices should go down, not the other way around... Correct? 


And at some point, many of you or your parents or grand-parents were also foreigners (SIC). You should never forget it. This is what the US is made of: all foreigners -- Irish, Cubans, Venezuelans, British, French, Italians, Spanish, Japanese, Chinese, Australians, Swedish, Germans, West Africans, etc.). The real natives there were Indians and Mexicans, but that’s past history...


You should see the boom it as a good thing and think about making business on this. This is my very humble point of view.

Art Kunhardt
Art Kunhardt

Alot of condos along Biscayne blvd are vacant. A lot! Paramount bay empty but sold out, 10 museum park empty but sold out, everglades on the bay empty but sold out, onyx on the bay empty but sold out. And there's many more. Its just used to clean up there money. I wouldn't give a shit if it wasn't for the high ass rent they are charging for miami locals. Its embarrassing that you look at these bldgs at night and the majority are all dark cuz no one lives in them.

Charles Resta
Charles Resta

And local businesses will suffer from the condos being essentially vacant. What a vicious cycle.

Jean Peña
Jean Peña

Very good point Evan Rowe or even better what are our official doing to rise a riot in the near future? Only foreigners have the right to live in our city really? That is not the America that I know something must happen to over come this. I'm just say!

Evan Rowe
Evan Rowe

The real question to chase on this: how many of these elite purchased condos are actually occupied and how many are just bought because there are limited outlets for capital and massive concentrations of capital in so few hands? In other words are we all suffering from the groupthink and competition amongst elitees against one another?

Homer Steel
Homer Steel

The City of Miami is simply TOO expensive, for it's Residents.

James G. Camp
James G. Camp

Who wants a downtown condo anyway ? Stacked on top of each other and valet parking holds you hostage.

James G. Camp
James G. Camp

And with no rent protection measures, the rent just keeps on escalating beyond ever owning a home. How can we ever thank Bush for the deregulation ?

Ale Rubio
Ale Rubio

Exaxtlyyyy my pointtt!! Lauren M Davenport

Mel-No
Mel-No

Melo Group is greedy and cheap. We live at 22 Skyview which is their newest rental community in Edgewater. When something breaks it takes for ever to get it repaired. The "Fitness Center" is not what they promised, it is not "state of the art", it is crap...cheap equipment, very small and is rarely cleaned. The hallways and carpets go ignored. Maintenance is just about none existent. They lied about the amount of guest parking that was allocated when the building opened. The front desk and office is run by "amateurs". The tenants "Social Room" does not exist. It is an empty room across from the gym. They made a "pretty" website, made promises,  then took our money and ran. Melo is a 2nd rate developer who is all about greed. Only a matter of time before they are caught up in a lawsuit. Do yourself a favor and spend a little more and get a condo unit. We are out as soon as our lease is up.  Spread the word: http://22skyview.com/

Art Kunhardt
Art Kunhardt

The real estate game is the new drug game for south Americans, they can buy up all these condos and wash there money. There is no check on this money. Every single one if these foreigners are money laundering. And Miami politicians turn a blind eye cuz of the property taxes.. Eventually it will blow up once the feds get involved and by then it to late.

Alexi Manresa
Alexi Manresa

All new construction is for millionaires, thus pricing the majority of the locals out of their own city. Maybe a government incentive program for developers to motivate them to build affordable condos for young professionals. Just a thought.

Lidia Carr
Lidia Carr

Anika Marie Dunkley weren't we just talking about this? People from Miami don't really live in Miami

Kevin Clark
Kevin Clark

90% of south florida is foreigners... You're not taking a huge leap there

frankd4
frankd4 topcommenter

@debbie_78fr


.................MOST if NOT ALL is in fact drug money


the terms of the sale transaction dictate that the cash security deposit(s) paid by the buyer are subject to RISK of loss in these current sales contracts that NO LEGITIMATE BUYER would EVER AGREE TO = period


in other words the buyer AGREES CONTRACTUALLY that the developer can steal your security deposit(s) and LEGALLY get away with it - only a drug kingpin would agree to such terms

frankd4
frankd4 topcommenter

......................you're right - MIAMI it's NOT america



frankd4
frankd4 topcommenter

.....................is mostly if not ALL drug money

frankd4
frankd4 topcommenter

@Mel-No


.....................these units are NOT meant to be occupied - drug money is parked here

nightcheese
nightcheese

@Mel-No Oh my god, i just LOLed at the pic of the "Social Room". And they sure are careful with the panoramic views. Last year my boyfriend lived in a smaller building behind the Skyview while it was being built. It was such a nightmare and a major shame all the quaint and appropriate buildings are getting knocked down to build these monsters. I shudder to think what the future holds. This condo boom can't last forever.

frankd4
frankd4 topcommenter

....................that's a BINGO !


if MIAMIans have a gripe it should be with who they elected to represent them = period


you get the government you deserve


however the drug money flowing into MIAMI is so overwhelming no single voting bloc could overcome that influence - so basically residents are screwed by a rotten and corrupt system


basically it is done by fellow hispanics screwing their bretheren - imagine if a lily-white redneck political KKK-style machine controlled MIAMI and kept the hispanic residents down as minimum wage day labor to these drug financed deals ? there would be a REVOLUTION !


thankfully its hispanic politics screwing resident hispanics

frankd4
frankd4 topcommenter

..................the politicians and LEOs and judges and code compliance and municipal administrators are ALL on the take


as for property taxes these are mostly re-spent IN THE SAME area they are paid through "Community Development" schemes - NOT into a general fund for public schools and real resident services


so a high rise luxury condo units property taxes may get spent on replacing the sand on the beachfront that building is on - and NOT a penny going to public education !

frankd4
frankd4 topcommenter

....................IF residents would demand public services such as schools and honest police and municipal services that would mean a the municipality would have to be budgeted with transparency and oversight  leaving less to steal and rob and loot and making it difficult to be corrupt - you know like a REAL community


drug money doesn't make demands on municipal services

frankd4
frankd4 topcommenter

......................actually the "property taxes" paid are not allocated into the general municipal services - those funds are appropriated into the same areas they originated from - which is why these luxury high rise building use main municipal services, sewer water police fire education, that actually are a strain on the municipalities resources while those funds are spent on beach sand and local luxury condo area area "improvements"


normally a developer would pay IMPACT FEEs to pay for the municipalities hook-ups and maintenance of water sewer schools etc but developers typically get these FEEs waived or deferred

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