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Miami: The ‘Hong Kong’ of the West

January 26, 2018

Chinese investors love Miami, according to Ellen Paris at Forbes. One of these investors, Caroline Li Griffith, is purchasing her third condo in Miami. As a private investor who splits her time between New York and Miami, Griffith loves the Miami lifestyle, weather, and people.

Griffith has already purchased two pre-construction condos at Paramount Miami Worldcenter, a 1 bedroom and a 2 bedroom for over $800,000 and $1million, respectively. Griffith says, “I like condos for investment because they are easier to manage. When I buy pre-construction, I can pay in installments before completion which is also attractive.” Currently, Griffith is deciding between leasing both units or having her mother use one as a second home. She states, “The ideal situation is about good cash flow where one unit is leased with the rental income paying for the other one.” Chinese investors view Miami as a global city, where one can buy low and sell high. According to Griffith, “As a real estate investment, Miami has much lower price points than Shanghai and Beijing which is very attractive.”

William Hardin, PhD, Professor of Finance and Real Estate and Director of the Hollo School of Real Estate at Florida International University in Miami states that “Miami is being developed as a product for people who want to own high-quality real estate at a certain price point. Developers here have been very successful with that and it’s got what today’s investors from China want.” He continues to state that, “Miami is a place that essentially exports its real estate product overseas because that is where the investment money comes from while the product itself being a luxury condominium stays here. As for how this relates to Chinese investors, Dr. Hardin says, “The wealth created in China is staggering. Real estate investment in the United States, especially in a booming and fast-growing metropolitan city like Miami, represents little economic risk to them.” Dr. Hardin adds, “They see real estate here as discounted. If this level of luxury product even exists in Beijing or Shanghai, the prices can easily be three to four times more. It’s a lifestyle for the Chinese and other foreign investors which is really a consumable investment where they can take a return and get their money out.”

William Yu, PhD, Economist, Anderson Forecast at UCLA Anderson School of Management seconds Dr. Hardin, states that “China’s upper middle class and upper class have enjoyed strong home appreciation. They have equity to invest elsewhere. Comparing prices, quality and the choices of what is available in Miami, compared to Shanghai and Beijing, Miami looks like a very good deal to Chinese investors.”

“Miami has long been an international city appealing to a mainly South American market. I’ve seen the demographics change over the last five years. The Chinese now rank as our third top buyer. With all our luxury amenities including shopping, dining, and entertainment they see Miami as the Hong Kong of the West,” says Peggy Fucci, CEO of One World Properties, a Miami/Ft. Lauderdale real estate firm. She continues to state that many Chinese investor, like Caroline Li Griffith, purchase 2 properties. They use one for personal use and one as an investment to lease.

With all that Miami has to offer, it’s not surprising that Chinese investors are turning their sights west.