FLORIDA: TOP US DESTINATION FOR INTERNATIONAL BUYERS

1. FLORIDA: TOP US DESTINATION FOR INTERNATIONAL BUYERS The Current Cycle and Beyond J. Claudio Stivelman

2. The Current Condo Cycle • Our current condo cycle began in 2012. Since then there’s been a total of 19,806 condo units were put on the market for sale in South Florida East of I-95: in Brickell, Downtown Miami, Coconut Grove, Miami Beach/South Beach, Bay Harbor, Sunny Isles, Hallandale Beach, Hollywood Beach, Aventura, North Miami Beach and East Ft. Lauderdale. • Out of the 19,806, 89% is currently sold leaving only 2079 units available for sale east of I-95 (587 delivered condos, 1309 Under construction and 183 pre-construction). • Since 2016, the average absorption rate was 1,340 condo residences (per year). At this current sales pace, all standing inventory will be sold by Summer of 2020 and the remaining pre-construction/under construction units should be sold out by the end of 2020.

3. The Current Condo Cycle • Many may say that right now is the time to buy because some developers are offering significant discounts and incentives to buyers in order to unload their current inventory so that they can begin the next cycle in 2020. • Because of theses favorable deals and the recent changes in politics, we’re seeing a lot of activity picking up from South America especially from Brazil, Colombia, Mexico and Argentina.

4. BRAZIL • Brazil is coming out of one of the worst recessions in its history. Last year a new government won the elections and is creating a business friendly environment in the country and generating more confidence in its economy. • Brazil needs to follow a reform agenda, particularly pension reform, for the country to enjoy sustainable economic growth. For that reform to take place, a constitutional amendment is required, which is politically challenging. HNW (High Net Worth) Brazilians are coming to Miami to invest and to buy, as are Mexicans, but for different reasons. • Brazilians are not concerned with the direction of the government, but are hopeful regarding the future.

5. MEXICO • Mexico is going for the first time through an experience of HNWIs being cautious on economic developments in the country. • We are seeing an increase of Mexicans looking to buy high end apartments as an alternative, if the political and social situation in Mexico worsens. • In the U.S., Mexican investors have traditionally done much of their business in Texas, California and Florida, states with substantial Mexican populations. Last year, Mexican Buyers purchased $284M in South Florida.

6. COLOMBIA • Colombia has been in the past years a very steady market since the political and social situation there is very stable. You will find a constant activity from Colombians buying real estate in Miami. • Both as an investment and also as a second home mainly in high end buildings with prices ranges between $1M - $2M. As the economy in Colom­bia keeps stable we will find Colombians looking to buy and invest in Miami as a diversification in their portfolios

7. ARGENTINA • Argentina is going through a very difficult time, politically, socially and economically. The dollar has appreciated almost 100% since Macri assumed office, and the initial optimism found at the beginning of his government has faded. This is an election year hence the decisions are going to be put on hold as well. The Argentinian market needs to feel confidence again in their economy in order to start buying.

8. The Top US Destination for Foreign Buyers • Florida is the top U.S. destination for foreign buyers according to NAR's 2018 Profile of International Transactions in U.S. Residential Real Estate. 54% of all international home sales are in Miami-Fort Lauderdale-West Palm Beach, according to the Florida Realtors 2018 Profile of International Residential Real Estate Activity in Florida. • Miami-Dade County accounted for the largest share of South Florida's foreign buyers (65% in 2018) followed by Broward County with 31 percent and. Palm Beach County with 4 percent.

9. The 12 Top Countries Buying South Florida • The 12 top countries of origin for consumers purchasing properties in South Florida are: • Brazil (12% of South Florida foreign purchases) • Colombia and Venezuela (11% each) • Argentina and Canada (8% each) • Mexico, France and Italy (4% each) • United Kingdom, China, Peru and Ecuador (3% each)

10. Foreign Homebuyers in South Florida • Foreign homebuyers accounted for $8.7 billion in total sales volume across the Miami-Fort Lauderdale-West Palm Beach area last year, $1.6 billion more than in 2017. • Brazilian buyers were the most active buyers, accounting for 12% ($1B) of all foreign home transactions in the South Florida area in 2018. • Brazilians have replaced Argentines as the biggest investors in South Florida real estate, according to a recent report by the Miami Realtors Association based on sales from August 2017 to July 2018.

11. Foreign Homebuyers in Miami-Dade • Miami-Dade remains an attractive destination for foreign buyers, who accounted for 65% of the real estate purchases. • Brazilians, accounted for 17% of the buyers, followed by Venezuelans at 13%, Argentines at 10%, Colombians at 9% and Dominicans and Canadians tied at 4% in Miami-Dade.

12. Interesting Facts • 58% percent of all international residential transactions in South Florida were made in all-cash. In comparison, about 47% of U.S. buyers paid cash. • 53% of the South Florida international homebuyers prefer condominiums, which they intend to use mainly as residential rental, vacation home or both • 5% of South Florida Foreign Buyers Purchased Homes Without Even Visiting Florida in 2018; About 12% purchased with just one visit; 27% purchased with two visits; 22% bought after visiting Florida three times.