Tourism Sparks Orlando’s Boom

The city's multifamily market is expanding rapidly as a result of its strengthening economic fundamentals. Its increasing population and employment make it one of the country’s fastest-growing cities.
Orlando rent evolution, click to enlarge

Orlando rent evolution, click to enlarge

Orlando’s multifamily market is expanding rapidly as a result of its strengthening economic fundamentals. Its increasing population and employment make it one of the country’s fastest-growing cities. The rental market benefits from an inflow of young professionals, which are drawn to affordable housing, a growing job base and a high quality of life.

The city added 54,000 jobs in 2016, up 4 percent year-over-year—a figure nearly twice the national average. Tourism remains Orlando’s economic pillar: The leisure and hospitality segment created the most new jobs. However, other employment segments are seeing robust expansion, thanks to increasing economic diversification. For example, the education and health care and the construction sectors each added more than 10,000 jobs in 2016.

Rapid economic expansion sparked a flurry of activity in the multifamily market. Construction is booming, with more than 7,000 multifamily units coming online in 2016 and 10,000 under construction. Supply was concentrated in the suburbs to the north and south of the city center. Investor demand is robust, with more than $2 billion in properties changing hands during each of the past two years. We expect strong demand for housing to persist, with rents rising 5.8 percent in 2017, though the amount of supply will temper growth to some extent.

Read the full Yardi Matrix report.