Condo construction remains strong, but construction of apartment units is at record levels in the downtown Miami area, a recent study says.
Downtown’s inventory of traditional rental units could increase fivefold in the next few years, according to the study. About 5,000 rental apartments are under construction, with another 5,000 in the planning stages, compared to an existing inventory of just 2,500 units.
The majority of groundbreakings last quarter were for apartment buildings rather than condos.
While the number of buyers who are able to place 50 percent deposits on pre-construction condos is limited, the demand for rental units seems almost insatiable. Occupancy remains near 100%, according to leasing agents. Leasing activity and prices continued to increase over the summer, and the ‘shadow inventory’ of rental units in condo buildings such as Millecento and BrickellHouse were quickly leased at high prices.
A large increase in the supply of rental units could eventually put pressure on the market, the authors of the study forecast. Lease rates could also move upward, however, as new inventory comes online, due to the better condition and more modern design of the new supply.