The Miami Herald
Special to The Miami Herald
January 4, 2015
6,400 NEW SOUTH FLORIDA CONDO UNITS SCHEDULED TO BE COMPLETED IN 2015
South Florida’s preconstruction condo market is poised to transition from conceptual to reality in 2015 as more than 65 new towers with nearly 6,400 units are scheduled to be completed east of Interstate 95 in the tricounty region within the next 12 months.
The new condo projects scheduled to be delivered in 2015 represent about a fivefold increase from the combined 20 towers with less than 1,200 units that have been completed in Miami-Dade, Broward and Palm Beach counties since this current real estate cycle began in 2011, according to the preconstruction condo projects website CraneSpotters.com. (For disclosure, my firm operates the website.)
Beyond this year, developers in South Florida are scheduled to complete 56 new towers with more than 6,700 new units in 2016, 30 new towers with nearly 5,000 units in 2017 and seven new towers with about 1,800 units in 2018. An additional seven towers with 1,600 units are scheduled to be built in 2022.
Based on some simple arithmetic, developers have either completed or announced the scheduled completion dates for more than 185 new condo towers with nearly 22,600 units in South Florida during this real estate cycle. It is worth noting the completion dates have not yet been released for an additional 124 South Florida condo towers with nearly 18,000 units previously announced during this cycle.
The pipeline of proposed projects with undisclosed completion dates is worth monitoring as any progress on these additional towers could significantly increase the supply of new units scheduled to be developed in the next few years.
After all, developers have already proposed to build in this cycle more than 310 new condo towers with 40,500 units east of Interstate 95 in South Florida as of Dec. 31, according to CraneSpotters.com.
No part of South Florida is expected to experience the impact of this current preconstruction condo boom more than Miami-Dade County.
More than 50 new condo tower with nearly 5,400 units are scheduled to be completed in Miami-Dade in 2015. In subsequent years in Miami-Dade, developers are planning to deliver 30 new towers with more than 5,000 units in 2016, about 18 new towers with nearly 4,400 units in 2017 and five new towers with about 1,700 units in 2018.
By comparison, developers in Broward County are scheduled to build 15 new towers with more than 1,000 new units in 2015, 15 new towers with nearly 1,100 units in 2016 and a dozen new towers with about 565 units in 2017. Developers are planning to deliver seven new towers with 1,600 condo units in Broward in 2022.
The juxtaposition of new condo construction activity in South Florida is linked primarily to the spending preferences of international buyers.
As the U.S. dollar was weak in recent years, international buyers with strong foreign currencies invested heavily in new and existing condo units in Miami-Dade, and to a lesser extent, Broward.
Back then, discounted condo prices combined with rising rental rates made South Florida condos an appealing investment for international buyers, who enjoyed added purchasing power as a result of their strong foreign currencies.
The climate of today’s South Florida condo market is far different than it was a few years ago at the start of this current real estate cycle. At the end of 2011, the total supply of condo resales available for purchase in South Florida had fallen to less than 24,100 units on the market as prices were still considered by many to be discounted, according to data from the Southeast Florida MLXchange.
Concurrently, the South Florida preconstruction condo market was just ramping up so the competition for buyers was somewhat limited, especially since developers demanded deposits of 50 percent of the contract purchase price.
Three years later, at the end of 2014, the supply of condo resales on the market had risen to nearly 26,100 units with many sellers seeking richer premiums.
Added to this, a growing number of developers of preconstruction condo units are now competing against condo resellers for the same pool of prospective buyers in South Florida.
The unanswered question going forward is whether record high rental rates combined with an increased willingness by lenders to provide financing will be enough to spur buyers to absorb the growing supply of condo units available for purchase in South Florida.
Peter Zalewski is a principal with the Miami real estate consultancy Condo Vultures.
SCHEDULED COMPLETION DATES FOR NEW CONDOS
Developers have announced plans to build 311 condo towers with 5,966 floors and 40,502 units east of I-95 in Miami-Dade, Broward and Palm Beach counties since 2011 in this real estate cycle. To date, the developers have announced schedule completion dates for 187 towers with 3,343 floors and 22,562 units as of Dec. 31, 2014. These are the figures for Miami-Dade and Broward: