International Interest Grows in Florida Real Estate Development: Currencies, Culture Work Together to Grow Foreign Interest in Local Construction
Currency devaluations in other nations are a big factor, but not the only factor, in growing international interest in South Florida real estate development. Consider these recent monetary events:
Venezuelan Bolivar 6.3:1
In Venezuela, for example, the Venezuela bolivar has been devalued 5 times since 2004 and in February 2013, the bolivar fell to 6.3 bolivars to 1 U.S. dollar. What happens now, after the recent death of Hugo Chavez, remains an issue: Chavez ordered the February devaluation to combat a growing budget deficit in his country.
In 2001, Argentina devalued its currency as part of an overall economic plan to avoid bank runs and other big, bad things from happening in an economic situation that many are currently comparing to what Greece is experiencing today. The Argentine plan, called the Corralito, devalued the peso and by 2002, it had fallen from the fixed rate of 1 peso to 1 U.S. dollar to an exchange of 4 pesos to 1 dollar.
Brazilian Real 2:1
Meanwhile, in Brazil, economists are looking at the Brazilian Real as being akin to the Australian dollar as being overvalued and at least one leading analyst is concerned that this means big trouble for Brazil in 2014 unless something is done quickly in Brazilian currency policy. Right now, the Brazilian real has fallen from a high in 2011 to a present exchange of 2 reals to 1 U.S. dollar.
Latin American Economies Fluctuations Provide Incentive for Florida Builders
Currency exchange rates, and their correlated inflation cycles, are just a few examples of how the national economies in Central America and South America are fluctuating in ways that are influencing land developers in those countries to look elsewhere to build.
Like South Florida.
As we've discussed in the past, there has been growing interest over the past few years of international investors in Florida real estate developments. Consider our past posts for details:
- Mexican Investors Doing Real Estate Deals in Florida is Not a Surprising Trend
- Foreign Investors Making More and More Real Estate Deals in Florida: A Trend That Should Continue into 2011
However, as covered by Reuters this week, more and more foreign development is happening in Miami and the rest of South Florida. From their coverage, the following examples:
- Argentine developer Jose Luis Melo and the Melo Group real estate company are building a 17-story, 98 unit condo tower on a $1.4 million parcel of land here in Miami;
- Latin American developers are tied to around 30% of newly announced South Florida residential projects; and
- Consultatio, one of Argentina's biggest real estate developers, is developing two sites in Miami. One has already begun: a 154 unit condo tower in Key Biscayne. They had purchased the land for another big project in a huge deal (one of the biggest last year) for Miami Beach, but the company has yet to break ground on that Bal Harbour tract.