Miami is home to the world’s busiest cruise ship harbour and the leading point of entry for imports from South America and the Caribbean. As well as being an important business and cultural hub, it is a hugely popular tourist destination, with access to attractions such as the Everglades, Miami Beach and the Art Deco Historic District.
Since the last housing market downturn, Miami has enjoyed a strong recovery with the number of completed units in the year to August 2018 up 43% on the 10-year average.
This has been driven by strong economic fundamentals, with a low unemployment rate at 4.1% and employment growth of 4.4% year on year to September 2018. Miami’s population is also increasing at a higher than the US average rate and is expected to continue to grow at 1.6% per annum over the next decade.
These factors have put upward pressure on house prices, which have now almost recovered back to their pre-financial crisis peak. At $333,600, average home prices in Miami are relatively affordable and just half the average in New York and Los Angeles.
Since 2017 house price growth has slowed to a more sustainable level, with the data showing an increase of 4.6% year on year in September 2018, reflecting higher mortgage rates, lower access to credit, and increasing levels of supply.
According to a survey of real estate agents, traffic congestion is becoming an increasingly important factor governing where people choose to live in and around Miami. It is hoped that the recently opened Brightline trainline and plans to extend this from West Palm Beach to Orlando via Cocoa will help alleviate this problem.
Rental growth was robust at 3.2% year on year in Q2 2018. While increasing levels of supply in the rental market are expected to soften rental growth over the next couple of years as new projects complete, rental growth is still expected to remain firmly in positive territory.