Miami High End Residential Outlook
In 2014, we have seen the continued strengthening of Miami’s high-end residential market. We saw closed sales of 1,330 properties with a median sales price of $2,330,000 during the first seven months of 2014, for a total of $3.1 billion in sales. The even more encouraging news is that a large percentage of these transactions are being done in cash.
The biggest factor for this increase in demand for high-end real estate has been a flood of capital from Latin America. Wealthy individuals from turbulent countries, such as Venezuela and Argentina,are seeking a safe haven for their savings and are finding it in Miami. Lately, demand has also been driven by high net worth individuals from the northeast seeking to experience a cosmopolitan lifestyle while enjoying the benefits of residing in a city that has no state or city income tax. This tax-free status makes Miami a tropical oasis compared to, for example,New York, where the major wants to hike taxes on the rich even further. This is why Miami is fast becoming the subtropical Manhattan.In addition, there has been increased activity from Eastern Europe, China, and the Middle East (with Qatar Airways now flying direct from Doha to Miami). Another attraction is the 40% increase in Miami condo rents since 2009, giving owners a good return on investment if they choose to lease their properties.
Miami’s Downtown Development Authority is successfully persuading companies to move to Miami citing its favorable tax environment and lovely weather. Eddie Lambert of ESL Investments moved his $10.6 billion hedge fund from Connecticut to Miami’s South Beach, and Universal, a $6 billion hedge fund in California, recently agreed to relocate. The giant brewery, SAB Miller, has also moved its Latin American head office from Colombia to Miami.
For the second year in a row, Christie’s International Real Estate, the world’s largest luxury real estate brokerage network, has included Miami on its Top 10 list of global luxury residential markets. Other cities on the list include London, Paris, Hong Kong and New York. However, when compared to those cities, Miami’s prices look inexpensive. For example, on average, a buyer can purchase six or more condos in downtown Miami for the same price of one apartment in central London.
Miami has taken huge strides over the past decade towards becoming a world-class city. Downtown Miami is currently undergoing a massive redevelopment project that will include the Miami Worldcenter, a 30-acre retail, hotel and convention-center complex. The recently opened Port of Miami Tunnel will alleviate much of downtown congestion and improve traffic flow in and around the city. There will be a new rail service beginning in 2018 between Miami, Fort Lauderdale and Orlando. High fashion, fine dining and chic entertainment all come together in Miami. The newly reborn Design District is being established as one of the most important design and fashion hubs worldwide, showcasing stunning new storefronts housing the more than one hundred luxurious brands. Museums, such as the Perez art museum, are opening. Art Basel picked Miami as one of the three venues for its shows. Tourism is at record levels. Miami is the only American city besides New York in the top ten of Knight Frank’s 2014 wealth report, which ranks cities by their attractiveness to the ultra-wealthy.
Miami offers refined living, a sophisticated infrastructure, an abundance of cultural amenities, and a cosmopolitan lifestyle. Whether seeking real estate, fashion, music, art, or any array of high-profile activities, the Miami brand is continuing to draw worldwide attention. The Christie’s Report is but one of many respected organizations that now believe Miami to be among the globally elite.