Historically, South Florida has had a direct relationship between direct travel routes and real estate growth and prosperity.
In the 1920’s, the “Big Three” railroad companies (Seaboard Airline, Florida East Coast, and Atlantic Coast Line) brought the first generation of buyers to our state. Pan Am’s non-stop flights from South American cities such as Buenos Aires, Rio de Janeiro, Sao Paolo, and Caracas (plus Mexico and the Caribbean) were the primary sources of new visitors to Miami from 1927 to 1991.
One could draw a direct correlation between real estate development in Miami Beach, Brickell, Bal Harbour, and Surfside in the 1950’s, ’60s, and ’70s and these international visitors.
THE NEW WAVE OF DIRECT GLOBAL FLIGHTS
Today, we are in the midst of an exciting new wave of direct transcontinental flights, creating fresh feeder markets to Greater Miami. Buyers from new countries (and continents!) are visiting and falling in love with Miami, and purchasing investment properties and/or second homes.
For example, Turkish Airlines recently launched a direct route from Istanbul to Miami, and Qatar Airlines now has a direct connection from Qatar to Miami. My colleague Ivan Ramirez, sales director at ONE Sotheby’s International Realty, reports “…a big increase of Turkish buyers in late 2016 and 2017, purchasing luxury and mid-priced condominiums in pre-construction projects such as Residences by Armani Casa in Sunny Isles, Paramount Bay in Miami, and Icon Brickell; plus less expensive investments, targeting rental income properties in Doral and Weston.”
These new Turkish buyers demonstrate the importance of the global market, and the immediate impact direct flights can have on our industry. Furthermore, new direct flights have recently been announced to and from Miami and places like Tel Aviv and Stockholm, offering the promise of more curious buyers from the Middle East and Europe.
ASIA: THE GOLDEN OPPORTUNITY
But Miami’s greatest opportunity for global interest lies to the Far East. Much has been made of Asia’s recent fascination with Miami real estate, and sure enough, more than 415,000 travelers made connecting flights between Asia and here in 2015, which ranked Miami International Airport No. 15 among all U.S. cities with Asian traffic — all without a direct flight.
“Asia has recently started providing us with a new and strong source of buyers for luxury condominiums and larger investment properties. They are aggressive in pursuing good locations and opportunities to renovate prominent waterfront sites, such as the former Miami Herald headquarters,” said Allan Kleer, a fellow Master Broker who is also a colleague with ONE Sotheby’s International.
Direct flights to and from Asia would supercharge this dramatically expanding market, and I was pleased to recently learn about Cathay Pacific Airways’ consideration of a proposal from Airbus to utilize a longer-range version of a new A350 aircraft (which would bring a nonstop Hong Kong to Miami route), plus additional efforts by MIA and county administrators to add a direct Miami to Asia route.
Just as direct flights can open exciting new international markets for Miami real estate, the absence of nonstop travel to/from certain parts of the world can also expose us to missed opportunities. As recently as this January, I had the opportunity to show property to a family visiting from Mumbai, India.
They were in Miami for a third visit and strongly considered purchasing a large condo on Brickell. The price, terms, and conditions were all favorable, except for one obstacle — no direct flights from India. Their options for flights were a Swiss Air-United connection with one stop and a 26-hour layover, or a Delta-Air France connection with two stops and 34 hours of combined layover. Unfortunately, this was a deal-breaker, and I have heard many similar stories from colleagues throughout Miami.
The good news is that real estate in South Florida will continue to grow, driven by the demands of these new visitors. They come to enjoy our weather, world-class restaurants and attractions, safety and stability, and a renewed arts and cultural scene. The quality, diversity, and relative affordability of properties today will satisfy this future demand. The low financing interest rates available to international buyers today are also quite attractive.
While we may experience some ups and downs along the road, Miami real estate will continue to be powered by affluent foreign buyers. The creation and addition of more nonstop direct international flights will dramatically stabilize and strengthen our unique market.
Fabian Garcia-Diaz is a member of the Master Brokers Forum, an elite network of the top real estate professionals in Miami, and executive director of sales and investments with ONE Sotheby’s International Realty. He can be reached at 305-785-8013 and/or firstname.lastname@example.org
▪ This opinion piece was written for Business Monday in the Miami Herald and does not necessarily reflect the viewpoint of the newspaper.
▪ Realtors may submit columns for Broker’s View of 700 words to to rclarke@MiamiHerald.com. This feature is intended primarily for residential brokers, but from time to time, pieces about commercial real estate will also be accepted.
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