Miami remains among the main destinations for investment in luxury roots in 2023, according to recent forecasts published in the Knight Frank report. According to studies, the Miami real estate market will see an expected appreciation of 5% in the luxury segment, in addition to the recent increase in interest rates and consequent increase in the inventory of properties available for sale.
The city of Miami is surpassed only by Dubai, in the same studio, which has an expected appreciation of 13.5% for 2023. After Miami, it follows Dublin, Lisbon and Los Angeles with an expected appreciation of 4%.
The global scenario of high inflation and interest rates will not affect the luxury segment in these destinations. On the contrary, in convulsive times, buying a property becomes one of the best strategies to protect assets. The political and economic uncertainties, both in the South American countries and in the countries directly affected by the War (Rusia and Ukraine) also alienate the rich in these countries to choose buildings in safe destinations to direct their investments.
Also, even with the expected appreciation, the luxury markets will cool down compared to the recent past. Even high-level investors, perceived as immune to inflation or crisis, seem to be reevaluating their investments.
In the 25 cities analyzed in the Knight Frank report, prices are expected to rise by an average of 2% in 2023, a percentage considerably lower than the 2.7% that the consultant projected six months ago.
The transition from a “seller” to a “buyer” market is gradually taking place. The increase in the inventory was considerable año after año. Buyers directly feel the impact of increases in interest rates on the financing portion. On the other hand, sellers resist lowering prices, frustrated by having lost the “frenzy” of a year ago.
Miami continues to be a paradise and safe haven for the rich. In addition to being a still hot market with great appreciation potential, the state of Florida offers low tax rates and is attracting companies from all sectors, with special emphasis on technology companies and financial institutions. Recently, the “Magic City” gained two new nicknames: 1 – New Silicon Valley and 2 – The Wall Street South.
Despite the fact that Dubai tops the list, it is the market that has suffered the most from the slowdown, as prices have grown around 50% in 2022, compared to a 13.5% ground projection in 2023. In this context , Miami continues to have the best recommendation.
Cash offers are better
In a scenario of uncertainty and crisis, buyers with “cash” offers (at cash), it is decided, without the need for a bank to finance the purchase, will tend to have greater negotiating power.
About AMG International Realty
AMG International Realty is a global real estate company specializing in Florida. If you want to know more about real estate opportunities in Miami, get in touch right now and chat with me via WhatsApp: +1 305 318 6968 (Heloisa Arazi).