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What Is The Reason Behind The Price Drops In The Luxury Condo Market?

August 11, 2017

In the last decade, the proliferation of populist Latin American governments have generated a strong devaluation of their currencies against the dollar with Mexico, Brazil, Argentina, Colombia, and Venezuela being affected. Native investors from those countries have halted investments in Miami because of this. Other countries in Europe and Asia that traditionally consume properties in Miami also suffered depreciations of their currencies against the dollar. And although the impact wasn't as harsh, they were still deeply affected. 

During the new real estate cycle that began in 2009 and came to an end in 2016, a huge amount of brand new luxury condominiums were built. Thousands of units in hundreds of projects that generated an oversupply. 

The decline of demand as well as the rising supply has created an opportunity similar to the global financial crisis towards the end of 2008. The reasons are very different, but the result is the same. 

"THESE UNITS CAN BE BOUGHT VERY INEXPENSIVELY"

Real estate investors who resold before 2016 made substantial profit. Those who did not sell on time should wait for the market rebound. However, they indirectly benefited by keeping their properties as a "safe". 

 

Many are looking to recuperate money that took a dive in their native countries and end up selling at losses because of inflation. 

 
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