The number of Miami apartment rentals shot up by 25% over the past decade, growing twice as fast as households in general. The insatiable appetite for rentals suggests that, besides population growth, other forces may be driving Miami’s love affair with apartment renting.
The second quarter of 2019 yielded the strongest demand on record, with close to 2,200 apartments absorbed by the market, according to CoStar records. The time from the second quarter of 2018 to the second quarter of 2019 was the strongest four quarters on record, with more than 6,000 units absorbed in the Miami metro area, or MSA.
The record demand comes at a time when apartment construction in the Miami MSA is also at the highest in its history, indicating that the city’s appetite has positive tailwinds. The actual absorption could be much higher, as this analysis does not include the shadow rental market that includes condos that are individually rented out.
Population growth drove the more than 10% rise in Miami households over the past economic cycle. The MSA added close to 350,000 new residents, growing at a rate that is twice that of the U.S. population growth rate. The number of people per Miami household remained steady over the period, at close to three people.
Though Miami’s population continues to grow faster than the national average, gains have decelerated.
In 2019, the Miami metro gained roughly 70 new residents per day, 55% below the influx seen during the 2011 high. Almost all of Miami’s population growth has been driven by international immigration, especially from Latin America.
The county’s heavy reliance on international migrants, as well as a strong national economy, has likely contributed to the population growth slowdown. Domestic migration has been negative over the past three years, as Miami residents sought economic opportunities in other parts of the country where incomes are higher.
New Miami residents over the past decade could only have accounted for, at most, half of the MSA’s apartment rental demand increase. Economics, rather than demographics, are likely having the biggest influence on where Miami residents choose to live, a topic that CoStar will address in a coming article.