We recently discussed Asian interest in the Miami luxury real estate market. However, another continent has moved its sites to the balmy south as well: Europeans. Let’s take a closer look at this market, and discuss how one can maximize the sale of a Miami property by catering to the tastes of this demographic.
The major reason for the spike in European interest in the Miami luxury real estate market is the failing economic climate in Europe. The euro was diving (although bouncing back now that the US has entered QE3), but even with the de-valued exchange rate, Europeans are looking to invest their money in markets they deem to be growing.
The Greek crisis, France’s new taxation policies on the rich, and the collapse of Portugal, Spain, Ireland, Iceland and Italy’s financial systems have many well-heeled Europeans looking for safer places to store their wealth. Some experts see a ‘perfect storm’ of conditions brewing that could lead to total devaluation of the euro, and a decimation of wealth not reinvested in a practical safe haven, such as Miami luxury real estate.
This spells out good news for Americans.
Europeans also see the value in getting more square footage for their invested capital. Centers like London or Paris do not offer luxury properties equivalent to the size of the properties being offered in Miami. Space is at a premium in Europe, so the opportunity to spread out in a three or four-bedroom “mansion” is all the more attractive, especially at low prices.
The majority of the properties purchased by this demographic are well over a million dollars. In a sense, the Europeans are helping to keep the Miami luxury real estate market afloat.
The largest spender is by far the Russians. The Russians seem attracted to the Miami lifestyle, the hot climate and the accumulated wealth of the region. It probably doesn’t hurt that there are a number of active and retired Russian sports stars living in the Miami area.
While the Russians tend to purchase luxury homes for their own use, the Germans and Scandinavians seem to gravitate to multi-unit properties for investment purposes. Apartment complexes and multiplexes can be used as retirement investment plans for independently wealthy Europeans.
Unfortunately for Europe, its problems are far away from being solved. Perhaps, there are some band-aides that will just kick the can down the road. As a result, we expect this continued uncertainly to sustain Europe’s taste for Miami real estate.