Property recovery alive and well in Florida
Once a huge draw for Irish investors, home values in the sunshine state are rising again
A For Sale sign outside a home in Miami, Florida. Photograph: Getty Images
Of all the markets in which Irish property investors dabbled down the years, none has proved more volatile than that of the US. An enormous country containing thousands of micro-markets, when it came to Irish buyers seeking holiday homes, central Florida was by far the most active. While central Florida is fairly sizeable, the draw was – and still is – Orlando and its theme parks.
Following the financial crash the Florida property market suffered more than most. In 2015 it was estimated that seven of its urban regions were still undervalued by more than 20 per cent.
Since then restricted building activity, employment growth and net immigration have significantly boosted existing home values. Prices are now back to about 80 per cent of pre-boom rates, although the figures range higher in better areas and lower in less desirable ones.
The US census calculates that 1,471 people move to the state every day. That is a population increase of over half a million a year to add to its current 21 million citizens. An estimated 8.2 million of these live in central Florida, which has led to Orlando’s airport undergoing a badly needed $1.5 billion expansion. In the near future a range of infrastructure projects should accommodate this growth, including upgrades to the I-4 motorway and an Orlando-Miami high-speed rail link.
Florida’s reliance on international buyers has reduced from nearly 50 per cent of total transactions in 2011 to 25 per cent in 2016. This is due to a greater reliance on American buyers allied to dollar appreciation which has deterred foreign investors somewhat. It is, however, getting a lot more traction in Asian markets.
While the effects of the financial crisis on property markets are still highly visible in areas of the US, Florida has ploughed on regardless. Prices have now posted monthly increases for four consecutive years. Orlando outperformed the rest of the state with 15 per cent growth in 2016, but 8 per cent to 9 per cent is the norm.
Dubliner Garry Kenny has been building in Florida for 20 years under the Feltrim Group banner. He sold Florida property from Ireland, then moved there permanently, opening his first agency in 1997 and soon graduated to developing properties.
The company now runs the full property life-cycle gamut of development, sales, rental, maintenance and property management. It hasn’t been all sunshine, and Kenny worked through the downturn by going back to the basics of estate agency work. Now he is back developing.
According to Kenny, the draw of Disney can’t be underestimated. It delivers a genuine year-round attraction to the area, which beach and ski resorts, for example, can’t match.
This is borne out in airports servicing the region. A direct Aer Lingus Dublin to Orlando flight in mid-October was filled pretty close to capacity. Flight loads on the route have been aided by a throughput of IAG group passengers from the UK availing of Dublin Airport Authority’s US customs pre-clearance facilities.
While we are inclined to view central Florida as just a tourist destination, this is far from the reality. Orlando’s central location makes it a hub for business, industry and, in particular, logistics.
Walmart is targeting 1,000 jobs at a newly opened 2.2 million sq ft warehousing operation in Davenport for e-commerce fulfilment. Amazon has announced a 2.4 million sq ft facility at the airport bringing 1,500 new jobs.
Florida is also home to the largest university in the US, Florida Polytechnic, founded to support Nasa’s space programme.
Although the state regularly experiences hurricane activity, Irma being the most recent to make an impression, it’s a big state and not all areas suffer equally. All Floridian homes are built “hurricane proof” which helps alleviate the worst of the damage. The impact of Irma in central Florida was pretty superficial compared to what was experienced along the coast.
Currently the Florida economy is taking a bit of a breather after a number of years of breakneck expansion, but if there’s one thing central Florida does well it’s unfettered capitalism. Disney World operates 365 days a year, and has closed just six times in 45 years, Irma being one of them.
Its Florida resorts, which employ 73,000 people and attracted 20 million visitors in 2016, sit on 25,000 acres of land southwest of Orlando – less than 50 per cent of this land bank has been used.
Buying in Florida
The first phase of Balmoral Resort opened its gates to guests in March 2017. The three-phase resort, which will contain 245 homes, is due to complete by early autumn 2018. It features custom-built, three-bed to eight-bed properties.
The development is 25 minutes south of Disney, and close to Legoland and a number of golf courses, including Southern Dunes.
Properties are managed centrally by Feltrim Resorts. The clubhouse includes its own water park, resort pool, splash playground restaurant and a variety of lakes and parks.
Once complete the resort will include a Ronaldo R9 soccer academy along with its own private school.
Prices start from $345,500 (about €297,500). Factor in management fees at Balmoral of around $480 per month to cover landscaping, pool maintenance and use of all resort amenities. Annual property taxes are about 1.5 per cent of the property value. For cash buyers there is a three-year leaseback option offering a return of 6 per cent net of all expenses.
For further information contact Balmoral on 001-863-353-0011 or visit balmoralflorida.com