Frederico Azevedo went to Florida looking for a second home. He left with three, paying $300,000 and $500,000 for condos in two Miami towers, and $1 million for a unit at the Trump International resort in nearby Sunny Isles.
“I bought one to use as a vacation home and the other two as investments,” Azevedo, 39, president of Construtora Altana Ltda, a housing-development company, said in a telephone interview from his office in Sao Paulo. “It’s actually very cheap in Miami compared to here.”
Surging real estate prices in Brazil and the currency’s 45 percent gain against the U.S. dollar since 2008 are sending Brazilians to South Florida in search of bargain vacation homes and property investments. That’s helping bolster Miami’s condo market, with total sales increasing 79 percent in the first five months of 2011 from a year earlier, according to data from the Florida Association of Realtors released today.
In the Miami area, Brazilians bought 9 percent of homes and apartments sold to international buyers in the 12 months through March 2010, behind only Canadians and Venezuelans, according to the Miami Association of Realtors. Since then, “anecdotal evidence certainly points to a significant increase,” said Lynda Fernandez, a spokeswoman for the group. In May, international clients bought about 60 percent of existing houses and condos and 90 percent of newly built homes, the association reported today.
As many as half of the downtown Miami condos that have been sold to foreigners for more than $500,000 since January were purchased by Brazilians, said Craig Studnicky, president of International Sales Group LLC, an Aventura, Florida, property- marketing firm. Buyers from Brazil also accounted for about half of sales of more than $1 million in Miami Beach.
Demand from Brazilians is “growing geometrically,” he said. “Next year, it’s clearly going to be the dominating force.”
The Brazilian real’s 45 percent increase against the dollar from the end of 2008 through yesterday is the best performance among 25 emerging-market currencies tracked by Bloomberg. The nation’s economy, Latin America’s biggest, grew 4.2 percent in the year through March 31, compared with U.S. expansion of 2.3 percent.
Pricier Than U.S.
The fastest economic growth in two decades last year and accelerating inflation made Sao Paulo, Rio de Janeiro and Brasilia more expensive than any U.S. city, according to a survey by ECA International, a London-based human-resources company. Brazil’s home prices rose an estimated 25 percent during the 12 months through May, with prices up 44 percent in Rio, Adrian E. Huerta, a JPMorgan Chase & Co. analyst in New York, and Marcelo Motta and Marina Mansur in Sao Paulo, wrote in a June 15 report.
“Are these price increases sustainable?” the analysts wrote. “Well, we are not seeing any deceleration in home price increases yet.”
U.S. housing prices have fallen to 2003 levels as foreclosures depress values and unemployment hovers around 9 percent. Miami-area homes are selling for 51 percent less than their December 2006 peak, according to the S&P/Case-Shiller index. Only Las Vegas and Phoenix had bigger price declines.
In Rio’s exclusive Leblon enclave, near the city’s Ipanema district of bossa nova fame, apartments sell for an average $1,058 a square foot ($11,388 a square meter), according to Sindicato da Habitacao do Rio de Janeiro, or Secovi, the city’s real estate association. In Miami’s South Beach, the average condominium price was $354 a square foot during this year’s first quarter, said Condo Vultures LLC, a Bal Harbour, Florida, real estate brokerage and consulting firm.