Florida: the return of the construction boom?
Brickell Skyline - Miami, Florida Photo: Adam Mizrahi
Florida is seeing demand for new-build properties soar from investors, but is the state's construction sector enjoying a boom?
Central Florida has certainly seen a surge in new developments coming to market in the past 18 months, with property agents there reporting strong interest in new-build properties from investors
"It's a good sign when North America's largest homebuilders are involved in developing new communities in Central Florida. Right now, these include DR Horton, Lennar, Pulte Group, Beazer Homes, Taylor Morrison and the Canadian firm Minto – the heavyweights are there and are busy,” says Richard Way of OverseasGuidesCompany.com, after a visit there in July.
“Around Orlando, in particular south of Disney World in areas such as Davenport, Kissimmee and Haines City, developers have returned to the market following a period that saw demand in the Sunshine State focused predominantly on foreclosures and distressed sales. Realtors tell me interest in pre-construction property, where a buyer chooses a lot and style of house that is then built within a new community, is very popular with investors, both lifestyle investors looking for short-term rentals and those buying for long-term lets. An increasing diversity of investors is helping to fuel the market too, with rises in Chinese, Brazilian and Venezuelan, as well as British, buyers notable in 2015.
In South Florida, though, this flooding of new projects is experiencing something of a hiccup. According to CraneSpotters.com, the latest count of new condo projects is 355 towers, with almost 43,000 units set to hit the market - far higher than the 255 towers and 34,600 unites announced in July 2014. Developers, though, are beginning to feel bearish rather than bullish about the market.
The future is now in question for "at least a dozen new condo projects", says the Miami Herald, as construction costs climb and the strong dollar has left the country less affordable for international buyers.
"More and more developers are opting to revise their original plans for preconstruction condo projects or even attempting to sell off their development sites," reports the Herald.
New homes, though, can offer more value than resale properties, argues Way.
"Prices for new homes are very appealing right now and often, when compared to a comparable resale, buyers see value in opting for the new home," he comments. "There are deals to be had on extras, such as granite worktops and furniture packages, which can run into the tens of thousands of dollars. And of course, a new home comes with new air con, often green and more efficient building materials, and typically a 10-year guarantee – which all bring peace of mind to an investor."