While analysts warn about potential oversupply in Miami’s luxury housing market, new construction is commanding record premiums and strong demand. According to Joelle Oiknine, Senior Global Real Estate Advisor at One Sotheby’s International Realty, buyers are paying far more for pre-construction and newly delivered properties than for older inventory, upending traditional assumptions about how supply and demand should affect prices.
Pre-Construction Price Surge
The price difference between new and existing properties has widened dramatically. “Properties sold in pre-construction for maybe $2,400 a square foot are now trading at $4,000, $5,000, $6,000 a square foot” in buildings like the Four Seasons, Oiknine said. This more than doubles the value per square foot from the initial sale to delivery.
Oiknine explained that many investors have seen strong returns by buying pre-construction and holding through the build period. Buyers lock in today’s pricing, then benefit from appreciation during the typical three to four years before delivery.
Flexible Buyer Timelines
Pre-construction attracts buyers who can wait for delivery and want to benefit both financially and logistically. “A lot of people are willing to wait because they’re getting a new property. They know their price will go up over the next three or four years until it’s built, and it routinely goes up,” Oiknine said.
This flexibility appeals to multiple types of buyers. Some are planning for a future move: “We still have kids in school. We’re not ready to move yet, but we want to get something. We can buy now and rent it out, or get a brand new unit in three years when we’re ready.” Others treat pre-construction as a pure investment opportunity.
Assessment Avoidance Drives Demand
A major factor fueling new construction demand is buyer reluctance to deal with costly assessments in older buildings. “We get calls looking for a condo, and they’re very specific – it has to be 20 years or newer. They don’t want to go into older buildings or deal with the assessments,” said team member Natalie.
As a result, there is heightened demand for newer buildings, while older properties face selling pressure due to looming assessments. This dynamic creates scarcity for new and recently built inventory, further pushing up prices.
Strong Absorption Despite Supply Concerns
Despite ongoing concerns about oversupply, Miami’s ability to absorb new inventory remains strong. Oiknine cited population data: “The stats are that 200 people are leaving and 1,000 coming in. So, on average, 1,000 every day to Florida.” This net daily influx of 800 people supports robust, ongoing demand for housing.
She noted that even during previous periods when media reports predicted years of excess inventory, the market absorbed new units quickly. “With the number of people moving here all the time, even with the new construction, we don’t have enough inventory to fulfill everybody’s needs,” Oiknine said.
Premiums Vary by Price Segment
The premium for new construction is most pronounced at lower price points, where it can price out first-time buyers. “For first-time buyers in areas like Coral Gables and Coconut Grove, new properties, new construction, were very high-priced compared to the regular homes,” Natalie said.
At higher price points, the difference between new and existing homes narrows in relative terms. “When you get to the higher price point, it’s not that much of a difference. There is a difference in the new construction, but it’s not that much compared with what’s on the market,” Oiknine explained.
Demand for Larger Units
Buyer preferences are also shifting toward larger homes. “People are now asking for larger properties. At one point they were building micro units. Now we need larger properties,” Oiknine said, pointing to a clear demand for more spacious layouts in new developments.
A Segmented Market
The current premium for new construction in Miami reflects a combination of buyer motivations: avoiding assessment risk, capturing appreciation, planning for future moves, and seeking more space. These factors drive sustained demand for new properties, even as overall inventory rises.
For developers and investors, understanding these motivations is key. Miami’s luxury market is becoming more segmented, with new construction forming a distinct premium tier supported by specific buyer demands, rather than following basic supply-demand formulas. This segmentation is likely to persist as long as buyers remain focused on quality, flexibility, and long-term value in their property choices.
