x Abu Dhabi, UAEFriday 28 July 2017

Honey, we own a bit of Florida

More than 700 people attended a show in Dubai to learn more about property deals in Florida and Brazil.

Florida house prices have fallen by anywhere from 30 to 50 per cent.
Florida house prices have fallen by anywhere from 30 to 50 per cent.

In the shadow of Dubai's growing skyline, hundreds of investors showed up at a hotel in the city at the weekend to learn more about buying distressed property in far-away Florida.

The promoters were also pitching houses in a project in Brazil, underscoring the growing international competition for investors, who are seeing a wide variety of schemes offered in resort destinations around the world.

Prices in Florida, America's "sunshine state," are down anywhere from 30 to 50 per cent since the peak. The market presents bargain prices, attractive rental yields and long-term stability, representatives of Bric Group, a Dutch property company that staged the event, told people attending.

Adam Jones, a Dubai resident who has invested in local property, was attracted to the event by Florida's relatively stable rental market.

"The Dubai market is still volatile," said Mr Jones, who paid US$92,500 (Dh339,700) during the event for a two-bedroom, 860 square feet condominium in Orlando. "The rental market there is very, very steady."

More than 700 people registered for the event, including investors from Qatar and Kuwait.

Although property valuations are down in the region and investors are wary, "people have disposable wealth", said Sam Rodgers, the Middle East and North Africa director for Bric. "They are cash rich." The turnout exceeded the expectations of organisers, who attracted only about 120 registrations for a one-day conference promoting Brazil property a year ago.

Bric offered 110 properties in Orlando, Tampa Bay and Jacksonville, priced from $49,000 to $500,000. The most expensive homes sold for more than $1 million at the peak of the market, Mr Rodgers said.

Interest in the US, especially in foreclosed properties, is high, especially among investors looking for a bargain. The company bought foreclosed properties at auction in Florida, renovated the homes and then rented them.

They are promising buyers yields ranging from 4.5 per cent to 13.5 per cent on their investments.

The company was also promoting a resort property in Brazil and sold about 30 properties from the country at the weekend.

About 25 Florida properties were sold during the two-day show, most in the $70,000 to $90,000 range, Mr Rodgers said.

There are similarities between the Florida and Dubai markets. Prices in Florida fell dramatically after a construction boom and a period of fast-rising valuations and heavy speculator activity.

The Florida market is now struggling with an oversupply of homes, especially in tourist areas such as Miami and Orlando.

But the state offers investors lower prices as well as the haven status of the US, said Mr Rodgers.

"I don't think there is any comparison" between deals in Dubai and Florida, he said. "Very often people buy in Florida because they can't afford to buy here."

Before the company could promote the property, it had to provide title deed and proof of ownership to receive a licence from Dubai's Real Estate Regulatory Authority.

Bric is now expanding beyond Florida to buy distressed properties in Las Vegas, Chicago and Detroit, other cities hit hard by the plunge in values. The company expects to offer those properties in Dubai in the near future.

Mr Jones, who works in finance, was sold on the Florida scheme by the promise of net yields of more than 8 per cent, without the "headaches" of the local market. "There is still a good market here. I just feel like it is more of a risk."

 

kbrass@thenational.ae