In a previous post I discussed the current reality of the Miami real estate market in which most of the best deals are being acquired by foreigners. Now we dig deeper to understand the causes of this buying frenzy. Nowadays, one of the most active buyers of Miami real estate are Brazilians. The question is, why are Brazilians so active now when they were not that active in previous occasions?
Brazil is part of the BRIC group of countries, which also includes Russia, India and China. These countries are also called the Big Four since they are countries that are expected to have more economic power than the G7 in the near future. Brazil's economy has grown very fast in the past decade and has attracted a lot of investors from all around the world. As a result, the cost of living and inflation have increased considerably. In addition, their currency, the real, has appreciated against the dollar in the last decade.
The best example I can give you is a Brazilian client who tells us that it is less expensive for him to bring his family to the US when they go on vacations than to go anywhere inside Brazil. Basically, they prefer to spend in dollars because it is cheaper here in the US. Furthermore, I have another Brazilian client who started buying properties in Miami a couple of years ago. He tells me the price per square foot in Brickell for a brand new condo is lower than the price per square foot in a good area of Sao Paulo for an older unit.
It is important to note that inflation is high in Brazil because the economy is improving and there is a lot of capital inflows. It is not like other countries in Latin America where inflation is high because of scarcity since they do not make anything and everything has to be imported, such as Venezuela.
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