Anyone paying attention to the news recently has probably noticed many headlines about Chinese stock markets and economy. Recently, they have been dropping. The country of China devalued the yuan, its currency, in Mid-August, and on Monday the Chinese stock market dropped 8.5 percent in one day.
Experts in the real estate industry have mixed feelings on what kind of effects these changes in China will bring to Florida real estate.
Some are not so optimistic, and think the Chinese economic downturn will hurt real estate in Florida.
“The devaluation of the yuan will make Florida real estate relatively more costly,” said John Tuccillo, chief economist, Florida Realtors. “This will discourage individual buyers and also Chinese companies looking to locate in Florida (who also generate residential sales).”
However, other experts disagree with this notion and think the Chinese economy will bring good things to the sunshine state. For example, economist Sean M. Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida in Orlando, says that while “slower growth could reduce the influx of Chinese money into Florida real estate, increasing uncertainty about the economy in China could spur an exit of capital that could be invested in real estate in Florida, among other things.”
Steve Cook, co-publisher and editor of Real Estate Economy Watch also shares positive sentiments. “The devalued yuan may keep mortgage rates low, at least temporarily,” Cook said. “Earlier this year, the Chinese government increased its purchases of U.S. Treasuries to the fastest pace since records began more than three decades ago. The buying has been fueled by China’s efforts to lift its export-driven economy by weakening its currency against the dollar.”
The Chinese themselves also feed into the real estate market in the US, playing an increasing role in both residential and commercial markets. An August report from Juwai.com, a real estate portal serving the region, said mainland Chinese buyers invested about $22 billion in U.S. real estate in 2014, and domestic Chinese-Americans invested $101.5 billion. There has been a significant increase of Chinese buyers in Florida.
Only time will tell the severity of effects of the Chinese economy’s affects on Florida real estate.
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