Construction starts in South Florida fall almost 40% in June

Rising construction costs are making it more expensive to build new projects

Jul.July 29, 2019 11:30 AM
Construction of a new home (Credit: iStock)

Construction of a new home (Credit: iStock)

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.

Related Articles

Jay Parker, Mike Pappas and Beth Butler

SoFla brokerage execs optimistic, say deals are still closing

Rendering of 850 Le Jeune and Century Homebuilders’ Sergio Pino

Sergio Pino re-opens construction site after workers test positive for Covid-19

Miami-Dade cracks down on social distancing at construction sites

Miami-Dade cracks down on social distancing at construction sites

Mayor, Miami-Dade County, Carlos A. Giménez (Credit: Ryan Holloway/ Armando Rodriguez Miami-Dade County Photographers)

Miami-Dade orders all non-essential businesses closed due to coronavirus

Miami-Dade Permitting and Inspection Center

Coronavirus case shuts down Miami-Dade permitting center until Monday, property appraiser closes office to public

Peter Dyga and MiMo Bay Apartments construction site

Social distancing? Coronavirus not stopping South Florida construction projects — for now

Florida Senate Passes Construction Retention Bill (Credit: iStock)

Florida Senate passes bill to lower retainage on public construction projects

(Credit: iStock)

South Florida residential construction starts jump 72% in January