The Investment Case: Exceptional Returns in a Booming Luxury Market

05.06.2025, from the Stonehard Team

Investing in Miami's luxury real estate market today means gaining early access to one of the fastest-growing high-end, high ROI ,  property markets in the world, with significant upside in both capital appreciation and rental yield performance, particularly in the ultra-premium and branded development segments.

1. Robust Capital Appreciation

Luxury real estate values in Miami have surged over the past five years, with prime waterfront neighborhoods appreciating between 8% and 15% annually. In ultra-exclusive areas such as Fisher Island, Coconut Grove, Edgewater, and Miami Beach, trophy properties have seen even higher increases, driven by limited inventory and relentless demand.

  • Pre-construction branded residences, such as The St. Regis Residences, Waldorf Astoria Tower, Aston Martin Residences, and The Ritz-Carlton Residences, are commanding record-breaking prices—and many buyers are already seeing 20%–30% appreciation between early-stage reservation and project completion.

2. High Rental Yields & Strong Cash Flow Potential

Miami’s growing population of high-income residents, executives, and remote workers is fueling a strong luxury rental market. Combined with South Florida’s status as a top destination for both domestic and international tourism, the short-term rental sector—where permitted—is thriving.

  • Luxury condos in high-demand areas like Brickell, Downtown, and South Beach generate 6%–8% gross annual rental yields, often outperforming comparable global cities.

  • Branded residences and waterfront homes with resort-style amenities can achieve 10%–12% gross rental yields, especially when operated through professional short-term rental platforms or hotel-managed programs.

3. Favorable Supply-Demand Imbalance

Miami’s development is geographically constrained by the Atlantic Ocean and Everglades, limiting expansion and keeping land scarce. This, paired with ongoing migration and foreign capital inflow, creates a sustained supply-demand imbalance, especially in the ultra-luxury segment.

  • Pre-construction opportunities offer investors the chance to buy at lower entry prices before full value is realized, particularly in branded towers where developer pricing increases incrementally during the sales cycle.

  • Once delivered, these residences often sell at a premium of 25%–40%, or sometimes even higher,  over the initial launch prices, depending on location, view, and exclusivity.

4. Favorable Tax Environment

Florida’s zero state income tax, no estate tax, and no tax on foreign-owned properties (aside from FIRPTA for U.S. sales) makes it an attractive market for wealth preservation and growth—especially for high-net-worth individuals from high-tax regions such as New York, California, Europe, and Latin America.


A Smart Investment in a Global Luxury Destination

With prices still competitive compared to luxury markets like New York, London, Paris, and Dubai, Miami offers matching or often better ROI and unmatched combination between  lifestyle quality and perks, at a lower cost . For global investors, businesses and luxury buyers seeking both capital protection, capital gain,  and lifestyle enjoyment, Miami delivers an unmatched value proposition.

Whether you’re acquiring a penthouse with panoramic ocean views, a branded residence in a skyline-defining tower, or a pre-construction property in a booming submarket—you’re not just buying real estate. You’re positioning yourself at the forefront of a luxury market on a historic rise.

Now is the time to enter. Miami is no longer a hidden gem—it’s a global icon in motion.

Stonehard PREMIER experts regularly prepare authored articles and analyses related to the new construction property market and the opportunities for profitable investments in this business segment.

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