Canadians looking to snap up dwindling real estate deals in Florida are finding themselves facing unexpected competition — from China.
With popular property markets like Vancouver and Toronto showing significant signs of softening, Asian investors seem to be shifting their focus south of the border, according to Canadians who specialize in marketing bargain-basement Florida houses and condos to snowbirds.
“Some of our clients got beat out recently because they were waiting to book flights. Some Chinese investors bought up 35 (townhouse-condo) units without even flying in first,” says Wayne Levy of Toronto-based Florida Home Finders.
“They looked at a picture. They wrote cheques. That’s what’s happening now.”
Asian interest in Florida has “really picked up steam in the last year,” says Levy, whose company is still seeing strong demand from Canadian buyers, but finding it increasingly challenging to find properties under $150,000 as the beleaguered U.S. housing market slowly recovers and the inventory of distressed homes drops.
“They’re seeing the U.S. as a safe haven to put their money,” says Montreal-born realtor Shant Epremian, co-founder of Boca Raton-based Pink Palm Properties, who’s just returned from two weeks in Hong Kong, Beijing and Singapore.
“I am slowly starting to tap into that market because there is a tremendous amount of money there. Buyers are looking for good opportunities and see that Florida is still on sale.”
In fact, there has been a surge in Asian buyers snapping everything from multi-million-dollar New York mansions to California estates, according to data from the U.S. National Association of Realtors.
While Florida has yet to see a surge of realty companies springing up to cater to Asian buyers, as has happened with the Canadian market since the U.S. housing market meltdown, websites like Juwai.com (Mandarin for “home overseas”) are creating links between Chinese buyers, in particular, and U.S. listings.
So far, Asian buyers remain “fairly minor players” in the Florida market, “but we are noticing some activity,” says John Tuccillo, chief economist for Florida Realtors, the trade association for the state’s 115,000 real estate professionals.
The biggest competition for Canadians, Tuccillo says, are investor groups that are now making unprecedented “bulk investments” — buying dozens of condos or houses at a time in markets, like Florida, which has seen steady price growth and the inventory of homes for sale sink to five months’ worth from the glut of 20 months back in 2008.
U.S. private real estate firm Blackstone Group LP, for instance, is just one of a handful of private companies now racing against the real estate recovery. It recently spent more than $2.5 billion on 16,000 houses in nine American cities, including Miami, which it plans to use as rentals.
“They are, in essence, wiping out the bottom of the market. It’s forcing other buyers to move up the price ladder,” says Tuccillo.
That, of course, includes Canadians who remain the dominant foreign buyers of Florida real estate, although their share of the market dropped to 31 per cent last year from 39 per cent in 2011, according to figures from Florida Realtors.
That’s partly because the pool of buyers has grown in the last year, says Tuccillo.
More Americans have been able to qualify for mortgages and buyers from other parts of the world, Brazil in particular, are not only on a buying binge, they’re willing to pay significantly more — median prices of $200,000 to $300,000 — about double the median paid by Canadians, according to Florida Realtors data.
All of which makes Ottawa resident Kathryn Millar happy she and her husband decided to make the leap now: They close later this month on a three-bedroom condo in Fort Myers that, with upgrades, cost $180,000 U.S.
The couple had planned on looking at Tampa’s Equestrian Parc development as well, but it had been bought out by Asian investors before they could make it to Florida.
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