The last race for the presidency of the United States was undoubtedly one of the most controversial in history. On one side Democrat Hillary Clinton and on the other, the republican and mega-businessman Donald Trump waged a battle with controversial, scandalous, and a lot of offensive phrases. Donald Trump, surprisingly, won the election causing a global astonishment, with immediate reactions in the stock market and numerous speculations about the impact of his government in the world’s economy.
In recent days many clients, friends and partners have asked me about the future of the real estate market in the United States, especially in Florida. That is why I decided to write this article, which considers my convictions on the subject based on more than 15 years working in the industry, as well as the opinions of colleagues, developers in Florida and other professionals in the industry.
After all, what is the impact of a Trump victory for the American Real Estate industry?
Donald Trump Speech
First of all, it is important to distinguish the electoral stance from what will be practiced by Trump once elected president.
In his first speech as president, Trump seemed to have forgotten the offensive and xenophobic statements done during his campaign. The tone is now about union. “Now it’s time for America to bind the wounds of division; have to get together. To all Republicans and Democrats and independents across this nation, I say it is time for us to come together as one united people. It’s time”, Trump said. “I pledge to every citizen of our land that I will be president for all Americans, and this is so important to me (…)”, he continued.
Another surprise in Donald Trump’s first speech were the complements to his opponent Hillary Clinton (considering that Trump threatened to arrest her if elected). “Hillary has worked very long and very hard over a long period of time, and we owe her a major debt of gratitude for her service to our country. I mean that very sincerely.”, Trump said.
Now that the US elections are over, markets finally begin to slowly digest the unexpected victory of Donald Trump for president. And it is increasingly clear that the tone and content of the Republican candidate’s speech in the campaigns were more a strategy to win over voters than a government plan. This paradox between electoral speech and reality was evident after Trump’s first speech as president. Read the entire transcript of Donald Trump’s Victory Speech.
The new statement pleased global markets with a clear message of comfort to foreign investors and especially to immigrants, who were heavily attacked during the Republican candidate’s campaign.
This issue of verbal attacks on immigrants during Trump’s campaign is another controversial situation that raises speculation about the impact on the American housing market. We’ll cover the next topic.
Donald Trump President and the Immigration Policy
Controversial phrases, and some even qualified as xenophobic, tempered Donald Trump’s speech during his race for the presidency of the United States. The most concerning debate is about the impacts that a restriction on immigration policies could have on foreign investments. The discussion gains more importance in states such as Florida, where the purchase of real estate by South Americans in recent years had enormous weight in the local economy.
Trump criticized in his campaign the problem of illegal immigration that the country faces. However, he did not demonstrate being against legal immigration. No wonder why! It is undeniable that he recognizes the importance of foreign investors, especially South Americans. As a Real Estate entrepreneur, Donald Trump has numerous developments in the industry, including Florida, where most of his clients are foreigners.
The foreign investor who invests within American law and rules is precisely the one that Trump wants to encourage to continue investing in the American economy.
In addition, most foreign investors in Miami and Florida do not aim to live in the US, but to invest. It is different situation.
In the last decades, the main reasons that have led investors from all over the world to invest in Miami were: stability of the real estate market, strong US currency, political and economic uncertainties in the countries of origin, appraisal potential among others. Most are indicators related to return on investment and protection of equity. It does not seem reasonable, therefore, to imagine that factors related to immigration policy would have a significant impact on the Florida real estate market, especially Miami.
Gil Dezer, a major Florida developer and Donald Trump’s former partner in several projects, was asked if Latin Americans would continue to invest in Miami as a stable economy. He said: ” I think you answered your own question here. Latin American investors are doing just that. They are investing. There is a small fraction of them that actually leave their businesses and families behind to move here. I don’t believe there will be any changes to tourism policies or tourist visas. Latin Americans looking to emigrate to the U.S.A. will most likely go the EB-5 route. That is a completely separate transaction from a real estate purchase.” Dezer said. Dezer Developments is responsible for many luxury Real Estate projects in Sunny Isles Beach and other elegant neighborhoods in Miami. Some high-end projects he developed are Porsche Design Tower, Armani Residences and the Trump Towers.
Trump and the future of Miami Real Estate Market
Trump is above all a businessman and a heavy real estate entrepreneur, as well as possessing the global investor perception that perhaps no other American president ever had. It is not in your interest to adopt policies that weaken or undermine any sector of the economy, especially the real estate industry. Quite the opposite! There is great expectation in the real estate market that Trump, once president, will use his influence and power to adopt policies favorable to the sector.
In its plan of government Trump wants to adopt measures that reduce the tax burden, burdens and excess of regulations in the country. Such measures would result in more income and consumer power for households, positively impacting the US economy. More income, more consumption and jobs are indicative of a strong and sustainable economy, which ends up attracting more foreign capital. With regard to the real estate sector, the expectation is that there will be appreciation of property prices in the long term.
Ezra Katz, founder and CEO of Aztec Group, a real estate investment bank in Miami, is optimistic when interviewed by the The Real Deal: “Our future president is a very knowledgeable real estate and construction person, and he understands the world of real estate better than any politician, ever,” Katz said. “He will create jobs that are positive for us and positive for the industry and create an enhanced opportunity for foreign investors to consider South Florida as a viable investment.”
At AMG International Realty we believe that Miami will continue to be a solid and safe market for real estate investments, as it has been for decades. The indicators remain strong and, compared to other global markets, it is hard to find one that has as many favorable aspects to foreign capital as Miami. A global businessman for president with a solid experience in the real estate industry is just another sign that now is a good time to consider investing in Miami.