Engel & Völkers Unternehmenszentrale Residential > Blog > Miami property market: High demand for real estate in premium segment

Miami property market: High demand for real estate in premium segment

The city of Miami in the sunshine state of Florida is one of the most attractive residential markets in the world. Regarded as the financial capital of Latin America, Miami ranks as the third largest city on the US East Coast, located on the southern tip of Florida, combining a dynamic economy with glamorous living. Miami attracts residents with its tropical climate, dream beaches and cultural diversity. „Miami has seen an unprecedented boom in first class home sales since the start of the pandemic, and there is no sign of a slowdown. As we progressed through 2020, prospective buyers were tempted by open space, warmer climate, and premium luxury amenities. The market for luxury, single family homes and condos saw prices rocket by over 20 percent in the first quarter of 2021. Beyond tax benefits and increased income, Covid-19 strengthened our clients’ desire to relocate and seek domicile in Miami on a permanent basis. Exceptional quality of life and great economical values is contributing to the housing demand. As large finance and tech companies are expanding or relocating to Miami and South Florida from high tax states, we are beckoning a new period of economic growth and prosperity,” says Magnus Jennemyr, Licence Partner at Engel & Völkers Miami Coconut Grove.

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- (Image source: Engel & Völkers Miami Coconut Grove)

Increased demand for spacious properties in prime locations

Among the most exclusive residential locations in Miami are those with a direct waterfront, on the islands or in gated communities. These desirable addresses, including Gables Estates, Palm-, Star-, Fisher- and Hibiscus Island, La Gorce, Indian Creek, Coconut Grove and Coral Gables afford a variety of outdoor, private amenities and plenty of open space, offering a high degree of privacy. However, properties in these areas rarely come onto the market – a fact reflected in their correspondingly high price tags. In such premium locations, the average sale price is 18 to 30 million US dollars (approx. 15 to 25 million euros) for detached properties and 10 to 20 million US dollars (approx. 8.5 to 16.5 million euros) for condominiums. When it comes to luxury real estate, Miami Beach with its density of rich and famous residents is also one of the most sought-after parts of the city. This prime location holds great appeal with its art deco flair, its setting in walking distance to the ocean, and its gourmet culinary delights. For particularly exceptional villas with exclusive amenities such as a helipad or private beach access, buyers can expect to pay in excess of 50 million US dollars (approx. 42 million euros). „Property values are steadily increasing despite the coronavirus crisis, and the real estate market is in terrific shape. We are seeing long term growth in luxury markets, with property values reaching new highs and redefining the market. The pandemic has prompted a growing trend towards more space and privacy. Buyers are looking for properties with ample room and space, be it detached houses or apartments,” Magnus Jennemyr stated.

On the market for condominiums, Engel & Völkers registered high demand once again at the end of 2020, after an initial slowdown. „Now is an opportune time to invest in premium condominiums and penthouses. Those featuring private elevators and outdoor space are especially sought after, as are those with fewer units per level than usual,” says Magnus Jennemyr. Buyers in Miami Beach, for example, will pay between 2,000 and 3,000 US dollars per square foot on average (approx. 18,000 to 27,000 euros per square metre). Good locations such as Coconut Grove and Coral Gables are seeing an influx of first-time home buyers flooding from New York, Midwest, and California. Particularly popular with families, the “Grove and Gables” feature abundant revival, classic and Spanish colonial architecture in lush, natural settings. Prices for detached properties here can reach up to 30 to 55 million US dollars (approx. 25 to 46 million euros). Condominiums can fetch prices of up to 20 million US dollars (approx. 16.5 million euros).

National buying activity higher than any time since 2010

The ratio of foreign buyers to buyers from other US states has reversed since 2010, shifting from 49 percent foreign and 21 percent domestic buyers to 23 percent foreign and 49 percent domestic buyers at present. The remaining 28 percent are local Florida investors. “Data from tax returns show that Florida is the first choice for people moving from New York, New Jersey, Illinois and Massachusetts,” reveals Magnus Jennemyr, adding: “The majority of international buyers come from Mexico, Argentina and Chile. A smaller percentage comes from Canada, Germany, France, Spain and Italy. Once vaccination programs progress and travel restrictions have been lifted, we will most definitely see a higher influx of international clientele.”

Outlook: Miami’s appeal as a residential and investment location set to continue

The coronavirus pandemic has altered the residential needs of searching clients, and redefined the notion of luxury. Excess demand for large luxury properties will keep increasing, and the upward trend on the residential real estate market is set to continue. „Due to the fact that it’s a financially prosperous city with tropical flair and tax-related advantages, Miami will continue to attract high net worth individuals, young and affluent professionals, as well as families and senior citizens. We have clearly witnessed the resilience of Miami’s real estate market during the pandemic. Our forecast is that real estate in the uppermost market segment will further strengthen its status as an investment with stable, long-term value,” says Magnus Jennemyr in summary.

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