Political changes in Latin America have led many of its wealthiest inhabitants to take their money out of their countries and, as an example, there are their luxury apartments in Miami. In the last year and a half, as the global economy hit historic rock bottoms, the city has enjoyed an increase in property purchases by Latin Americans. This is not a wave of investment like those that have been seen before, they assure brokers and sellers. This time they make their investment their new residence.
Presidents and presidential candidates scare the wealthiest. In Mexico, President Andrés Manuel López Obrador has alienated businessmen and wants to cancel contracts with private parties. In Peru, Pedro Castillo fired the most radical members of his Cabinet under pressure from the markets. In Chile a new constitution is being written, while a leftist candidate for the presidency jumps to the top spot in the polls. In Colombia, the government of Iván Duque faced long and bloody protests, making way for the left-wing candidate, Gustavo Petro, to compete for his position.
Capital outflow from the region is difficult to measure, but evident on a day-to-day basis. Some more than others, currencies have depreciated in the last year; some investment banks have decided to exit; and banks abroad cannot cope with requests to open accounts there. For many, the best way to get their capital is by investing it in a property and, in Florida, 34% of foreign buyers come from countries in Latin America according to the National Association of Realtors (NAR, for its acronym in English). ).
“Now we are seeing a very important resurgence in the Latin American market,” says Sergio Pintos, head of the sales team at Waldorf Astoria in Miami. Mexico, Colombia, Peru and Ecuador are, in that order, the strongest markets for Pintos and his team. 16% of the purchases of Waldorf’s flagship luxury building, which is 100 stories high, have been made by Mexicans. “As a consequence of the economic and political issues of each country in particular, they decide to distribute and diversify their investments and they want to bring some of those investments to Miami. Within those is the real estate”.
The pandemic exposed weaknesses in Latin America. On the one hand, the need to remain in confinement made visible the high informality and precariousness in which a large part of the population lives. Health systems, subjected to the stress of infections, showed their weaknesses, and the slowness of accessing vaccines made it clear that governments have little capacity for cooperation and weight at the international level.
On the other, living conditions boiled to the point of exploding. In Brazil, Peru, Chile and Colombia, strong social protests were generated fueled by poverty and inequality. This is leading to a recomposition of the political landscape, with the emergence of polarizing, radical and, in some cases, authoritarian figures, which generates uncertainty and mistrust among the wealthiest.
Investment and residence
“Miami is benefiting from the decentralization that caused the pandemic and that has acted as a catalyst for one of the largest increases in immigration of Latin Americans to the city,” says Yamal Yidios, founder and CEO of Ytech, a real estate firm in the United States. “I have seen that the interest of Latin Americans has evolved from investing and owning a second home in Miami to living and working from here.”
In many cases, Yidios says, Latin Americans who traveled to Miami during the pandemic to get vaccinated discovered that they could work from there, thanks to telecommuting. According to a report by the real estate company International Sales Group, Miami received 950 new residents a day in 2020, both foreigners and Americans. Its attractions include its climate and low tax rates. “The city has evolved from being a financial and vacation district to one of the most important centers of technology, entrepreneurship and innovation where Latin Americans of all socioeconomic levels want to be.”
Chile and Colombia
Both Pintos and Yidios agree that there is a new market that is rapidly gaining momentum: Chile. “The Chilean, because of his culture, traditionally invested in Chile. Now, despite the fact that it is not a major player, there is an increase in the number of Chileans who start buying ”. In the last two months, Pintos shares, he has interviewed Chilean real estate companies looking to specialize in Miami property sales from Chile.
“What Chilean buyers tell me is that it is a fundamentally political issue,” says Pintos, “because they believe that there may be a radical change in Chile from the following year in the economy, driven by politics. Thats the reality”. In addition, Pintos says, the Colombian market, which had not been among the most powerful for a decade, has returned strongly in the last twelve months, driven by the social situation and the country’s political prospects.
They pay in cryptocurrencies
The use of cryptocurrencies has become so common that users already buy real estate with it, says Merrick Theobald, spokesperson and marketing manager of the BitPay payment platform. Through internet portals such as condos.com, for example, many Latin Americans are buying properties in cryptocurrencies. “When the price of their cryptocurrencies goes up, people like to use their earnings to buy something, most commonly something luxury or property. They buy jewelry, a car, but also an apartment, ”says Theobald.
“We are seeing, especially this year, an increase in transactions from countries in Latin America,” said the specialist. “It is a region with many bitcoin holders, it is a region that increasingly believes in cryptocurrencies due to their decentralized condition, something they prefer over the authorities.”
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