Foreign Buyers Tap The Brakes On Miami Condo Purchases

International buyers are hesitating to sign on the dotted line for Miami real estate amid a backdrop of hardened immigration policies, a teetering trade war and currency fluctuations.

South Florida has long been a magnet for wealthy investors from around the world to park cash in second or third homes, but sale momentum is slowing. Brokers and lenders say deals are taking longer as buyers adopt a wait-and-see approach amid global uncertainty and shifting policies.

“We started seeing it before the election, and everybody thought that after the election, things were going to ease up. But it didn’t,” OneWorld Properties President and CEO Peggy Olin said. “I think that was the biggest surprise. Everybody was expecting a huge influx after the election, and I think the opposite happened.”

Florida has been the top state for foreign buyers for 16 years, with nearly half of those sales in Miami, Fort Lauderdale or West Palm Beach, according to a 2024 report by Florida Realtors.

But investments from non-U.S. residents have dropped. In 2024, international buyers accounted for just 10% of Miami condo and single-family home transactions, down from 18% in 2023, according to a report by Miami Realtors. Sales volume from foreign investors dropped from $5.1B to $3.1B last year.

Claudia Castano, as founder of Miami Lending Advisors, helps international buyers land residential and commercial mortgages. She visited clients in Colombia this month and heard many voicing unease about traveling to the U.S.

“They asked me that question, like three times, if people were having issues at the airport,” Castano said. 

President Donald Trump’s promise to deport 20 million people has gotten off to a volatile start. But for luxury international buyers who hold B-1 or B-2 visas, which allow for temporary travel to the U.S., Miami real estate players said they don't expect deportations to be a problem.

Yet, amid reports that residents with green cards are being interrogated at  airport checkpoints by federal agents, some attorneys are recommending that some green card holders delay international travel, The Washington Post reported.

Olin, who has worked with clients from more than 60 different countries, is noticing interested buyers drag their feet when it comes to buying a condo in Miami.

“It happened to me today. We have a Mexico buyer who's looking at one of our projects,” Olin said Wednesday. “We've been working with them since January, and it's May, and he still hasn't made a decision. But he's not not engaged. He's in town and he's coming by.”

Foreign buyers are taking twice as long to close a deal as in recent years, and they are asking more questions about the impact of U.S. policies and market conditions, particularly concerning timing of construction, material prices and interest rates, Castano said.

“At the beginning of the year, when Trump got elected, we had this boost from South America coming to Miami,” said Danilo Tavares, a sales associate with The Corcoran Group who specializes in assisting clients relocating from outside the U.S. “Then the tariff war starts, and they put a pause. They say, ‘We’re not going to invest in the U.S. anymore.’”

The hesitation is especially common among foreign buyers considering purchasing second homes or future residences, not those focused on yield, Olin said. Those purchasers make up about 71% of foreign real estate deals, according to Miami Realtors.

These buyers are often weighing long-term lifestyle decisions, including possible migration or future use, making them more sensitive to uncertainty in the market and timing, especially when considering multimillion-dollar purchases, Olin said.

It has put pressure on various relationships. Canadians spent nearly $6B on U.S. real estate between April 2023 and March 2024, accounting for 13% of all foreign transactions, Reuters reported, citing National Association of Realtors data. Half of those purchases were for vacation homes, with Florida, Arizona and Hawaii the top destinations.

But with trade tensions and presidential rhetoric about annexing the U.S.' neighbor to the north, many Canadians have begun selling off their second homes. Return flights from the U.S. to Canada fell 13.5% in March, while return automobile trips dropped 32% from the prior year, Reuters reported.

Olin said she has noticed Canadian buyers have pulled back from the market, although she said she hasn't had conversations directly pointing to politics as the reason. Olin said weaker currency and ongoing real estate challenges in Canada are more to blame.

“They're just not willing right now to be buying into the U.S.,” Olin said.

Nearly 60% of international buyers in South Florida purchase a condo, and the majority of them use their property as a vacation home that is otherwise rented out on a short-term basis, according to Miami Realtors.

These types of properties drove a huge wave of development coming out of the pandemic. By May 2024, short-term rental units made up more than half of South Florida’s new condo pipeline, The Real Deal reported.

But short-term rentals also face some headwinds, as many rely on international tourists to cover their mortgage. While demand for the investment continues, lenders are becoming more cautious, said Zack Simkins, a private lender with Miami-based Vaster.

That means tightening loan-to-value ratios, requiring foreign buyers to contribute more equity upfront. The shift in financing practices is aimed at ensuring that buyers remain committed to their investments, Simkins said.

“If there is uncertainty or there is more caution, sometimes that could trickle down to defaults,” Simkins said. “There's one thing, as far as transactions and looking to close goes, then you also have to make sure you manage your portfolios and ensure that the borrowers that are part of your portfolio are paying on time and are still acting appropriately.”

Hesitation from foreign buyers is impacting various aspects of the market, but Simkins hasn't seen a significant toll in the data yet, with his portfolio still running at about 60% domestic and 40% international.

However, in conversations with his international clients, Simkins has noticed a shift in energy.

“The emotional toll, the perception, the conversations, it's more prevalent,” he said.