In 2017 Florida was the nation’s top state for foreign commercial property investors
Florida has always ensured a solid return for both domestic and global investors and by and large, for people interested in real estate, Florida topping the foreign investment scene wouldn’t be surprising. In 2015, Florida also ranked fourth for international capital flow in the U.S. While Florida won by a clear margin of 23 percent, Texas came in second with 16 percent. Canada wasn’t far behind, with its total investment being 13 percent.
Of all the CRE (Commercial Real Estate) Buyers, Mexico investors made for about 11 percent, shortly followed by Canada at 8 and the lowest of them. The United Kingdom at 6 percent. If combined, Europe, Asia, and America accounted for 82 percent of the foreign buyers.
As purchase from cash eliminates the risk of the loan being denied at a later date, 70 percent of the sales came in through cash and the rest was closed through mortgages from U.S. sources. The buyers from abroad where nearly two-thirds and of them, 57 percent were temporary residents living in the U.S.
The future of the foreign investments in commercial real estate came into question when the Chinese companies began to face difficulties due to the rules and regulations its government imposed on them. According to the National Association of Realtors report, despite the change in the game plan, Chinese investors still made up for 20% of buyers in the U.S, which is also the largest percentage of share and is higher than the percentage in 2016.
This isn’t to say the market wasn’t completely affected. Statistics show that the ultimately calculated dollar amount plummeted to a whopping 30 percent. It went from $156 billion in 2016 to $120 billion in 2017. It is speculated that instead of the rise in Chinese share being a positive impact, there is the real possibility that there is a dip in the investments from other countries.
Among all these upheaval and downhill in the real estate world, “What makes Florida a clear winner?”, you may ask. Leading the commercial real estate within the states is South Florida, a place with heavy population and laws that are tax friendly.
A central hub for international business, Florida is a widely popular travel destination. Combine this with beautiful real estate properties and a wide cultural diversity that makes place for everyone, we have a blooming market.
According to the population index, Florida’s population has seen a steady growth of 2 percent per year since 2010. Prediction is that Miami’s population will grow by 1.4 percent this year while Palm Beach will have double the growth, that is 2.8 percent. Miami’s wage growth since 2010 is also 3.3 percent per year, ranking the state consistently at 18th and outdoing the national average by 1.9 percent. Both population growth and rise in income demands better living conditions and house-hunting for the general population. Foreign investors, of course, don’t hesitate to take advantage of this need.
Population growth and wage growth not only imply better living conditions but opportunities for business growth too. People, by design, want better things in life when they have the means to do so. Foreign Investors have the assurance that if they invest in commercial real estate, they will get lucrative income. Florida’s ranking as the 2nd rated state for business is a clear proof, followed by the tax climate, which ranks it on number 4 in the nation.
For foreigners and domestic investors out there, if you’re looking for a place to invest your capital in, Florida is the way to go. Both for CRE and personal financial business.