Germans have found a niche on Cape Coral. Brazilians, Argentineans and Colombians tend to favor Miami. And Canadians are everywhere. Florida isn’t just the locale of choice for retirees from the northern U.S. As the state’s population continues to boom, a sizeable portion of those buying property here hail from other lands.
International buyers purchased about $16 billion worth of Florida’s homes from August 2018 through July 2019, according to a National Association of Realtors annual report. That constitutes about 12 percent of Florida’s total home sales. Florida remains, by far, the most popular state for foreign investment. About 20 percent of all purchases by foreign buyers happened in the Sunshine State, according to the National Association of Realtors. Only California (12 percent) and Texas (10 percent) came close.
LOCATION, LOCATION, LOCATION
Breaking down the numbers a bit more, the majority of foreign buyers tend to look toward large cities. The Miami area specifically gets about half of the state’s foreign investment, attracting the majority of its buyers from Canada and Latin American countries.
In Southwest Florida, Canadians and Europeans are the dominant buyers. Canadians, in particular, make up about half of Southwest Florida’s investors. Anik Lauzon and Dave Lessard of John R. Wood Properties specialize in working with Canadian clients. They find that the majority of their clients come from Ontario, who have been flying down to visit on direct flights from Toronto or Ottawa and find the Gulf shore less crowded and more appealing than the east coast. Still, Lauzon, who is Canadian herself, sees a lot of room for growth in the Southwest Florida market. “Lots of Canadians have never been to the west coast and don’t know what we have to offer,” she says.
Germans and British tend to be the major European buyers in Southwest Florida. Germans, in particular, have found a second home in Cape Coral, a trend that started decades ago with tourism advertising campaigns and direct flights from Germany into Southwest Florida International Airport. Last year, Germans made up about 18 percent of the foreign buyers in the Fort Myers-Cape Coral area, according to the National Association of Realtors report.
Kirsten Paul of Paul International Consultants, which has offices in Frankfurt, Fort Myers and Fort Lauderdale, has been working with international real estate buyers for more than 25 years. She notes that the German buyers tend to fall in love with the luxury lifestyle here, and even after just a couple of visits, start looking to buy. Life under a sunny sky on the beach seems pretty great … then they find out how much more affordable it is to buy here than in Germany. (According to the National Association of Realtors, the price per square meter in Naples, for example, is $2,570. In Berlin, it is $7,330.) Once they get beyond the higher real estate tax bill, they find investing fairly easy. “They can get so much more for their money in Southwest Florida,” Paul says.
DOWNS AND UPS
Southwest Florida and the state as a whole haven’t been spared from a recent downturn in foreign investment. Foreign buyers in 2019 purchased about 36.4 million homes in Florida, a 30 percent decrease from the year before.
The main culprit: A strong dollar. With a stronger dollar, foreign buyers are having to spend more of their money when making a purchase. That, combined with a downturn in global growth and a tightened inventory stateside, contributed to the slowdown. As for the future, the aftermath of coronavirus is a big unknown for the time being. But there are reasons to see a silver lining in what will surely be an economic downturn, Lauzon says. “What we know from history in Southwest Florida is when market conditions, the economy and consumer confidence are strong going into an unforeseen event such as the coronavirus, we typically demonstrate a remarkable ability to recover quickly once the storm has passed.”
