A lot of happenings or recent challenges are taking place in the economy. There is an evident downfall in the real estate industry. Still, these challenging times also proved that realtors could be more resourceful and innovative, looking for ways to alleviate the real estate market.
According to the real estate market is likely to see a lot of changes, from how the realtors do business to how people buy houses. With the economy fluctuating condition, more investors turn to real estate market because of its resilience. Yet, to get most of the real estate market, an investor needs to spot the trends before they become apparent to everyone. Even rental properties will not be left out, they will likely be affected by this trend. As part of the strategies, realtors start by uncovering the trends and some ways to use them to stay relevant in the field. The changes are constant, and it will not only end this year, but it will also be the thing in upcoming years.
These are the trends listed below that are likely to impact the real estate market and how investors in the field can make the most of them in the coming years:
GROWING DEMAND FOR EXPERIENCED AGENTS
Facilitating real estate deals is not easy, especially with inexperienced agents. There are more part-time agents this time, and they account for almost 50% of the transactions. There is nothing wrong with them handling deals, but clients grow more savvy. People will prefer professional agents that delivers timely result. Simultaneously, the need for experts in real estate’s such as photographers and editors will rise.
THE RISE ON INTEREST RATE
I believe the largest impact on real estate will be created by rising interest rates. There is no way the financial institutions can continue to lend at 12% lending rate. It’s not feasible. At some point, reality will take over and we will go back to more historic interest rates. When this happens, buyers will have a harder time securing financing, and home sales will slow down. When it comes to real estate, the relationship between inflation and rising interest rates becomes more complex. Inflation is often the critical driver of interest rates, and as such the two typically move together. While rising interest rates can reduce the value of future cash-flows, inflation can in turn increase the value of physical property since real estate is a hard asset. This fact has made real estate one of the most sought-after investment classes in periods of rising interest rates because of its ability to weather the storm of inflation.
MORE FOCUS ON HEALTH AND WELLBEING
Buildings or any properties now in this time of pandemic should consider more valuable spaces that impact health and well-being. They should consider safety measures and implement more policies that focus on tenants’ or clients’ overall health. One thing to keep an eye on is how the built environment impacts your health and wellbeing. Designing and constructing in way that will not impose threat to someone’s overall health will be something consumers and end users will gravitate towards.
MORE PEOPLE MIGRATING TO THE SUBURBS AND OUTSKIRTS
A major determinant of home buying decisions is distance from office. Work from home has resulted in buyers looking for better amenities rather than connectivity or proximity to the office. The suburbs are set to benefit as home buyers reduce their priority in terms of location and distance and move towards better and bigger places instead. Prices of under-construction properties had dropped during the lockdown and have now returned to pre-pandemic levels. 2021 began on a high note and sales of ready inventory has picked up which may lead to increase in price of under-construction properties. In the next 2-3 quarters, prices will slightly move up as good ready stock is already consumed. However, the allure of big metros and urban centres have waned, and the trend continues to hold. As work from home is popular, the location near commercial spaces won't matter much and outskirts will do well. Additionally, morel companies will shift into remote work set-ups, and for other people, freelancing is a great option.
INCREASE IN DEMAND FOR A BIGGER HOMES
The trend towards bigger homes is driven purely by the fact that homes double up as offices for a work-from-home professional. The increasing perceived utility of homes has already enabled the housing market to pick up pace and the trend towards bigger homes is here to stay. The preference for bigger homes is resulting in higher ticket size as well as demand for luxury flats.
MORE FOCUS ON OUTDOOR AMENITIES
Amenities have always been a unique selling proposition for many projects, having a swimming pool and clubhouse will slip down in priority, while amenities which support work from home like study room, library, would gain prominence. In an increasingly health-conscious society, health centres and jogging tracks within the project would make it further attractive. Amenities have always been an important factor in influencing buying behaviour. However, Covid-19 has completely changed the kind of amenities that are and will be in demand. With people spending more time at home, outdoor amenities have never been more vital. In coming years, we expect to see residents flood apartment properties that feature amenities like playing parks, outdoor theatre etc.
EXCHANGE OF WEALTH BETWEEN OWNERSHIP
I foresee a large exchange of wealth between ownership. While work from home resulted in preference for rental space in the commercial segment, the exact reverse happened in the case of residential segment. Home is where you would be quarantined in case of emergency, and everyone wants it to be their own house. Due to this, prices of ready houses are set to increase which will be followed by increase in prices of under-construction properties within the next two - three quarters.
Finally, change is the very constant variable in the world and the real estate market is not left out on this phenomenal global change.
