* Venezuelans driven by 'Chavez effect'
* Miami a top U.S. destination for international buyers
* Brazilians, Argentines also buying up Miami properties
* Cash purchases dominate Miami real estate market
By Kevin Gray
MIAMI, Feb 23 Many Venezuelans have long
had a love affair with Miami, but rarely has it been so intense
- as least judging by the property market.
The cash-rich South Americans are leading a charge into
Miami real estate, helping to spur a recovery in a market that
once stood as a poster child of America's housing bust.
Enticed by what they view as cheap real estate prices and
paying in cash, Venezuelan buyers have snapped up condominiums,
apartments and houses as investments or second homes.
They are joined by other South Americans cashing in on
recent heady economic growth in their region, which also
weathered the global downturn fairly well.
Wealthy Venezuelans, faced with dwindling investment
opportunities back home and worried about what they describe as
a crackdown on the country's domestic housing market by leftist
President Hugo Chavez, have become sought-after clients for real
estate developers and brokers.
"They pull out their checkbooks right away," said Harvey
Hernandez, a Venezuelan-born managing director of the Newgard
Group, which is developing BrickellHouse, one of the first condo
towers scheduled to be built since the real estate crash.
At BrickellHouse, more than half of the tower's 374 units
have been sold, with Venezuelans representing around 40 percent
of the buyers. The tower, located in Miami's financial district
with views of Biscayne Bay, is slated to start construction
later this year.
Venezuelans have also helped reinvigorate real estate
markets in Miami suburbs like Doral and Weston, home to large
Venezuelan expatriate communities.
"It's the Chavez effect," said Cleto Puzzi, a Venezuelan who
sold an apartment he owned in Spain and bought two in Doral that
he now rents. "You can't invest in Venezuela these days."
The Venezuelan leader's penchant for expropriations has
rattled many well-to-do Venezuelans. Last year, Chavez
introduced legislation that makes it more difficult for
landlords to evict delinquent renters, spooking property owners
and chilling interest in one of the few investment options in
"Chavez basically has served as the greatest backstop the
South Florida and Miami condo market has seen," said Peter
Zalewski, a principal with the real estate consultancy Condo
The wave of property buying by Venezuelans and other South
Americans has re-energized Miami real estate developers who are
rolling out new projects even as Florida remains among the
states hardest hit by the housing collapse. It has also
transformed Miami into a top real estate destination for
"Latin America has really helped to breathe new life into
our market," said Jorge Perez, the chairman and chief executive
of Related Group, a leading South Florida developer.
Venezuelans, like many Latin Americans, have historically
turned to Miami real estate as a safe haven against political
and economic volatility at home.
According to the Miami Association of Realtors, Venezuelans
were the top foreign buyers in 2011 and accounted for 15 percent
of all sales to international buyers, followed closely by
Brazilians and Argentines.
Last year, sales of houses and condos in the Miami area rose
a record 46 percent compared with 2010, the association said.
Condo prices finally began to rebound in the second half of last
year, and December also saw an appreciation in single-family
homes for the first time since the recession.
Latin Americans are turning to Miami real estate as property
prices back home have soared.
A recent report by Miami-based RelatedISG, a real estate
sales group, said prices of downtown Miami apartments and condos
trail those at newly built properties in several South American
cities, including Rio de Janeiro, Sao Paulo, Buenos Aires and
Prices in downtown Miami average more than $400 a square
foot, the report said. That compares with $1,000 a square foot
for properties in Rio de Janeiro, $900 in Sao Paulo and $550 in
Surging real estate prices in Brazil have also sent
Brazilians on the hunt for Miami property.
For Brazilians, "everything is so cheap. Going to dinner,
buying a shirt, buying a condo," said Jacques Claudio Stivelman,
the president of Miami-based Shefaor Development and a native of
Big-spending Brazilians are drawing particular interest
among Miami realty agents who say they come looking for high-end
"Brazilians are buying in the million dollar plus range,"
Foreign interest is not only limited to buying real estate.
International developers are also heavily involved in more than
20 planned building projects, many of them likely to be marketed
to foreign investors.
The interest from Latin Americans has led real estate
developers, many of whom were stung during the U.S. housing
crash, to adopt new financing and sales models.
Before the bust, Miami condo and real estate developers and
property buyers relied heavily on bank financing. But as the
market unraveled, developers watched as clients walked away from
their deposits and banks, worried about falling housing prices,
shut off lending.
Empty condo towers soon dotted Miami's downtown skyline.
With Latin Americans and other non-U.S. buyers now
representing a majority of real estate sales in Miami,
developers have unveiled a more cash-focused financing option
familiar to foreign buyers.
The pay-as-you-go model means buyers pay at certain stages
of construction. It is used widely in Latin America and requires
buyers to pay as much 80 percent of the property's final price
before construction is completed.
"I don't think this is a long-term approach, this is a
reaction to the way this market is in its current form," said
Ivan Martinez, a 40-year-old lawyer in Caracas, recently
bought two apartments at BrickellHouse for $250,000 and
"Miami is like a second home for me," he said, rattling off
trips he had made since he was a child. Venezuela's political
instability, he said, was a key factor in his decision.
Some realtors who work frequently with Venezuelans said they
expect their interest in Miami real estate to remain strong,
particularly if Chavez wins a presidential election later this
year and extends his 13 years in power.
Eli Santurio, a sales manager at Keyes Realtor, said many
realtors were joining Venezuelans in keeping a close eye on the
run-up to the October vote.
"That's what everybody is talking about," she said. "If
Chavez wins, then sales could increase big time."