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Current Real Estate Development Cycle Shows More Maturity | Part II
Additionally, in this current cycle, most of the units are not only sold, but also have 50% deposits, as explained above, diminishing the default risk substantially. Moreover, almost 67% of all units sold in this current cycle were paid in cash without any financing. This is important, because the foreign buyer's today, who are not buying units as a second residence, are not investing to speculate, as it happened in the previous cycle, but rather to diversify their asset base and obtain a current income in dollars by renting their units after closing. This is a much more sustainable model looking ahead.
As a final remark, the real estate market has significantly deleveraged, and actors in the industry have learnt from the previous cycle mistakes, which implies that South Florida real estate market is showing stronger signs of maturity. This is why a crash landing scenario is not likely, but rather a soft landing, where appreciation shall decelerate, and some opportunities will happen in certain buildings/areas. But the delivery profile from 2018 onwards shall create a new pent-up demand and a new appreciation cycle from 2019/2020.
YuliyaKachko Group with ONE Sotheby's International Realty focuses on the luxury condos and sale in the markets such as Miami Beach real estate for sale, South Beach real estate for sale, Surfside real estate for sale, Bal Harbour real estate for sale, Sunny Isles Beach real estate for sale, Golden Beach FL real estate for sale, Aventura real estate for sale. For more local markets news please read our Miami real estate blog.
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