Miami’s condo market has slowed considerably, as unsold units pile up to create previously unseen inventory levels. To address the problem, developers are getting creative with the kinds of incentives they’re offering to buyers.

Luxury condo buildings are seeing international buyers begin to turn away. With less demand and lots of competition among unsold units, sellers are increasingly turning to add-ons and special deals to incentivize buyers, according to a report in The Real Deal.

For example, the Marina Palms development in North Miami Beach is offering a year free of taxes and homeowners’ association fees for those who buy in April, the South Florida real estate blog reports. With an average unit price of $1.3 million, the incentives value $22,000 on average.

In March, the Paraiso complex in Edgewater began offering a slew of incentives, including a 30 percent deposit, down from the usual 50 percent deposit required of many luxury units. Its developer, the Related Group, has also increased commissions for the sale of units at Paraiso, according to The Real Deal. (Two other Related developments lowered deposit amounts at other luxury buildings.)

Other recent incentives for Miami-area condos include:

• Buyers of a condo in the Aurora development in Bay Harbor Islands were offered a one-year membership to JetSmarter, a private jet-sharing company, which costs about $9,500, according to a August 2016 article in City and Shore. 
• A town-home development in town recently offered a one-year membership for up to two people at Midtown Athletic Club in Weston, which is a “resortlike” athletic club including a bistro and boutique shop.
• Buyers at Riva in Fort Lauderdale recently received a 35-foot boat slip, valued at $150,000, for the purchase of a penthouse unit.

A desperate act?

The incentives offered in these cases are not out of desperation, developers told The Real Deal. Many of these buildings were almost completely sold when the incentives were offered, and they were offered so sales drives can be finalized and projects advanced to the next stage.

“It’s so we can dismantle the sales center in the back and finish construction,” the developer of the Paraiso towers told The Real Deal.

But other experts believe the plush incentives do highlight the problems with the condo market in Miami. If demand was high enough, the incentives would not be needed. Often, such incentives are the last step before a unit lowers in price, which is the last resort for developers.

“A developer does not want to cut pricing, so what a developer will do first is raise commissions for brokers; second, eliminate or offer free maintenance; third is to provide incentive or credit for buildout of units; and the final step is reduce prices,” Peter Zalewski, principal at Cranespotters, told The Real Deal.