An annual report from Miami’s Downtown Development Authority revealed a healthy condo market, an ailing rental market and a future dependence on Chinese money.

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Early this week, the Miami Downtown Development Authority, using research from Integra Realty Resources, or IRR, released its annual overview of the area’s residential real estate market, and the findings were largely a reiteration of what optimists have been saying since mid-2014: The city is approaching a balance.

A move towards sustainability is particularly evident in the city’s condo market, where supply is rushing to meet demand. Since its last annual report, Miami DDA researchers recorded huge gains in the number of units under construction, from 4,458 in 2013 to 6,019 in last year – a 14 percent increase. Pricing in the resale condo market also took a jump, rising 16 percent from 2013 to 2014. However, the pace of appreciation has slowed considerably since the 22 percent increase in 2013 and the 27 percent gain in 2013 – a clear indicator of forthcoming stabilization.

Renting a Condo, Not the Same as Buying a Condo

One sector where growth was not seemingly imminent was the condo rental market. Miami DDA discovered that as a result of frequent rental increase requests from individual owner landlords, condo renters are more often looking for accommodations in alternative rental markets. Some telling findings of the report included:

• Condo rental rates per unit continued increasing, with the average gross lease price per month nearing $3,000 and the current asking rate almost $3,300 per month.
• Rates per square foot per month is nearing $3,000 in Brickell, Arts & Entertainment and Midtown, which put rates on par with other luxury markets in the county.

A silver lining, if such can be gleaned from the report’s numbers, is that there are almost 2,600 conventional rental units under construction and only 1,000 will be delivered in 2015, which should provide some limited rate relief to the market.