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Ellen Paris, Forbes.com contributor
Chinese Investors love Miami. Caroline Li Griffith is purchasing her third luxury condo in Miami. Griffith, a private real estate investor originally from Zhenjiang in Jiangsu province splits her time between New York and Miami. “I love the Miami lifestyle, its weather and the people,” Griffith explains.
Griffith recently bought two-units in the pre-construction phase at the PARAMOUNT Miami Worldcenter. The price tags—a one bedroom for over $800,000 and a two-bedroom rings in at $1 million. Completion isn’t scheduled for at least a year. “I like condos for investment because they are easier to manage. When I buy pre-construction, I can pay in installments before completion which is also attractive.”
Right now, Griffith isn’t sure if she will lease both units out or have her mother who lives in Argentina use one as a second home. “The ideal situation is about good cash flow where one unit is leased with the rental income paying for the other unit,” Griffith explains.
Griffith points to the fact that Chinese investors see Miami as a global city, where for them they can buy relatively low and sell high later. “As a real estate investment, Miami has much lower price points than Shanghai and Beijing which is very attractive.”
Long known as a haven for foreign money, much from Latin America, it’s not surprising Miami is increasingly in favor with Chinese investors. Listen to William Hardin, PhD, Professor of Finance and Real Estate and Director of the Hollo School of Real Estate at Florida International University in Miami.
“Miami is being developed as a product for people who want to own high quality real estate at a certain price point. Developers here have been very successful with that and it’s got what today’s investors from China want.”
In the global real estate community, “Miami is a place that essentially exports its real estate product overseas because that is where the investment money comes from while the product itself being a luxury condominium stays here,” Hardin observes. That works perfectly for Chinese investors. “The wealth created in China is staggering. Real estate investment in the United States especially in a booming and fast growing metropolitan city like Miami represents little economic risk to them.”
When many Chinese see first-hand how far their money goes once they have made the decision to consider Miami it’s an easy sell. “They see real estate here as discounted. If this level of luxury product even exists in Beijing or Shanghai, the prices can easily be three to four times more. It’s a lifestyle for the Chinese and other foreign investors which is really a consumable investment where they can take a return and get their money out,” Hardin adds.
William Yu, PhD, Economist, Anderson Forecast at UCLA Anderson School of Management has witnessed first-hand Chinese investment in Los Angeles. He see’s strong Chinese interest continuing in Miami. “China’s upper middle class and upper class have enjoyed strong home appreciation. They have equity to invest elsewhere. Comparing prices, quality and the choices of what is available in Miami, compared to Shanghai and Beijing, Miami looks like a very good deal to Chinese investors.”
Peggy Fucci, CEO of One World Properties a Miami/Ft. Lauderdale real estate firm is about to open a fully-staffed and full-service office selling Miami to Chinese investors in Shanghai. “There is so much business coming from China that I felt I needed to establish a strong presence there. I found traveling a few times a year isn’t the same as having a permanent office,” says Fucci who has spent 19 years selling South Florida real estate.
According to Fucci, many of her Chinese investors buy two properties. As Caroline Li Griffith plans, one condo is for personal use and one to generate income from leasing.
“Miami has long been an international city appealing to a mainly South American market. I’ve seen the demographics change over the last five years. The Chinese now rank as our third top buyer. With all our luxury amenities including; shopping, dining and entertainment they see Miami as the Hong Kong of the West,” Fucci says.
Considering Hong Kong’s explosive growth, Investors in Miami have much to look forward to.