Construction starts in South Florida fell significantly in June amid continued signs that the commercial and residential real estate markets are slowing down after years of rapid growth on a national and local level.
Total construction starts declined 39 percent on a yearly basis in South Florida to $1.01 billion, according to Dodge Data and Analytics.
Construction of nonresidential properties fell to $400.4 million from the previous year, a drop of about 38 percent. Meanwhile residential construction fell even further, declining to $613.5 million, a decrease of 40 percent.
The data shows that developers could be holding off on building new projects in South Florida because of the rising costs of construction such as supplies and labor. Land prices in South Florida have also risen drastically, making it more costly to build and more difficult for investors to achieve the returns they’ve gotten in the past.
Another recent report by BuildFax signals that new home construction is slowing due to these rising costs. Single-family housing permit authorizations nationally decreased by 2.75 percent in June, year-over-year, according to the report by BuildFax.
Federal Reserve Chair Jerome Powell even made this point in July and suggested that Trump’s tariff and immigration policies are making homebuilding too expensive.
Dodge Data defines nonresidential as office, retail, hotels, warehouses, manufacturing, educational, healthcare, religious, government, recreational and other buildings. Residential includes single-family and multifamily housing.