Courtesy of Audrey Ross
The dollar is the world’s reserve currency. Around the globe, markets are experiencing large fluctuations and foreign investors are putting their money into the dollar and hard assets to protect their wealth. American real estate is viewed as a form of asset protection. Miami is very popular among Latin Americans who want to move their money out of their native countries and invest their cash in stable assets. The Top foreign buyers in Miami are from Venezuela, Argentina, Brazil and Columbia. Buying up USA properties is a strategy to hedge against falling currencies, market fluctuations and political instability. Miami is a cosmopolitan city that offers these buyers an opportunity to own a beautiful home along one of the most striking coastlines in the world. For the million plus buyer purchasing in cash, Miami is ideal.
Comparatively, a strong dollar means that foreigners purchasing real estate in America get less for their money than they do in their respective countries. However, because the dollar is the reserve currency, a strong dollar is incentive to purchase property in Miami. If your native currency is at risk for devaluation or collapse, you want to move your money out of that currency to protect your assets. Since July 2014, the dollar has risen 15% according to the dollar index. The value of the dollar is set by the demand for the dollar. Strong demand means buyers are placing their money in the currency. Investors want dollars, and they want their assets valued in dollars. Major cities in the USA such as New York, Miami, Los Angeles and San Francisco have experienced large spikes in real estate prices driven in part by the influx of foreign buyers into these markets.
This trend is not expected to slow down anytime soon. Miami is especially attractive not just because of its pristine beauty, ideal climate, cosmopolitan culture and proximity to Latin America, but also because the luxury housing market is stable. A strong dollar is actually a vote in confidence in the USA economy, and the USA is seen as a safe haven compared to other global market alternatives. As long as political volatility continues and the markets prove themselves to be unstable, physical assets are the best bets from a global perspective. Miami remains one of the most attractive markets to purchase property for many international buyers.