Miami’s preconstruction condo market is still forging ahead, despite signs of canceled projects, lowered deposit requirements and foreign buyers downsizing purchases, a group of top developers said Tuesday.
“This is a marathon, not a 100-meter dash. This is a long-term market,” said Carlos Rosso, president of Related Group’s condominium division, during a panel titled “Industry giants discuss the condo market” at the Urban Land Institute’s Miami Condo Market Symposium at the Four Seasons Hotel in Miami.
Kevin Maloney, founder and principal of Property Markets Group, said he expects that many proposed projects will not be built as planned. He said he interviewed a contractor who said he had nine jobs. “I was convinced eight were not getting built,” Maloney said. Months later, the contractor had only three jobs.
“Construction prices will start to go down. They are already starting, because a lot of projects planned to be built are not going to be done,” he said. “It’s all going to come to an equilibrium. It is going to take some time.”
Among Maloney’s planned projects is a 500-unit rental apartment complex at 300 Biscayne Boulevard, his first rental property downtown, on which he plans to break ground soon.
Yet for South Florida to become a world class city, it needs public transportation, said Alan Ojeda, founder and CEO of Rilea Group, which is currently completing the Bond on Brickell. “We need to make a push for that,” he said.
In the Brickell area, Related’s Brickell Heights condo project recently lowered deposits to 30 percent from the 50 percent requirement that has become standard this cycle. Rosso said the move was to spur sales among local buyers, once the project was almost sold out.
Ugo Colombo, who is developing Brickell Flatiron, agreed that lowering deposits can help “close out a project,” by attracting local buyers, particularly those who are seeking mortgages.
Despite weakening currencies in some Latin American countries, Rosso said Latin American buyers still dominate sales at Related’s Miami projects. He said buyers hail from Argentina, Brazil, Mexico, Venezuela and Colombia. He said he is also seeing an influx of European buyers, particularly from Italy and Spain. And projects further north in South Florida are attracting Northeasterners and local buyers, said Rosso, who said he remains “super bullish” on the market.
While foreign buyers previously bought five or six units, they have downscaled their purchases and are now buying one, he said. Regardless, Rosso said, they still prefer to park their money here. And the vast majority of preconstruction condo buyers still pay cash, the developers agreed.
“People are still not looking for financing,” Rosso said. “It’s good for Miami. It’s going to be a healthy market, not a market where buyers owe money to banks.”