Related’s Perez says international interest could cause another condo crash in Miami
The international buyers that have powered Miami’s real estate recovery are now creating “a mini-boom,” Related Group CEO Jorge Perez said in an interview with GlobeSt.com.
“The desire of international buyers to purchase in Miami … [is] increasing land values to almost the price realized during the top of the market,” he said.
Perez acknowledged that the percieved scope of the demand could potentially lead to an increase in supply that overcompensates for the demand and causes another crash, “as has repeatedly happened in the past.”
But Perez said Related Group is taking two steps to mitigate its risk exposure in Miami’s condominium market. First, it is requiring buyers put down at least 40 percent equity in their purchases of units in Related’s forthcoming projects, such as MyBrickell and Apogee Beach. Second, 14 of the firm’s 20 planned developments will be introduced as rentals.
“South Florida occupancies are over 95% and rents have risen considerably over the last few years,” he said. “We expect this trend to continue and feel that the multifamily rental market will be very strong over the next decade.” [GlobeSt]