Yardi Matrix: Miami’s Rising Tide
- Feb 22, 2017
Miami continues to benefit from the rising tide of foreign investment as players from South America and other parts of the world hedge currency volatility while seeking a safe haven for capital. The result has been skyrocketing construction and rapid growth in rents. Miami remains as trendy as ever, but there are questions as to whether the development is too much too fast and whether the incoming foreign capital is permanent.
In the meantime, employment and population growth continue. Miami’s traditional job segments were paced in 2016 by professional and business services, which added more than a quarter of the metro’s 49,500 new positions. Affordability, however, remains a big issue, as the metro has the most cost-burdened renters in the country. Despite the surge in home prices, homeownership continues to be the more affordable option, but Miamians stick to renting. The preference to rent rather than own is driven by Millennials—for reasons such as mobility, location and access to capital—but also by Baby Boomers, who are looking to downsize their homes.
Demand is strong, as roughly 100,000 units are in some stage of development,
and transaction activity has grown considerably, crossing the $3 billion mark in 2016. With demand still rising, we expect new inventory to be absorbed and rents to grow by a solid 5.5 percent in 2017.
Read the full Yardi Matrix report.