Real estate investment has been a popular choice among investors for many years due to its consistent potential for profit and stability. However, with the ever-changing economic landscape and advancements in technology, it’s important to stay informed about the latest trends and forecasted changes in the real estate industry. This article will explore the future of real estate investment, including a deep dive into the current trends and forecasts that surround it.
The Rise of Technology in Real Estate
Technology has been slowly but steadily transforming the real estate industry, a trend that is likely to continue in the coming years. Online property listings, virtual tours, and AI-powered predictive analytics are just a few examples of how technology has changed the way we search for and buy property.
Virtual reality (VR) technology is providing a new level of immersive experiences, particularly for those buying off-plan. Homebuyers can now “walk” through their new homes, as well as customize the interiors virtually before a single brick is laid.
The rise of instant data sources has made it easier to access information about properties, including historical pricing data, average rental yields, average time-to-sell, and much more. That has made it a lot easier for investors to make informed decisions.
Globalization vs. Localization
Real estate investing changes not just on a local level but global too. In recent years, there has been a significant uptick in globalization. Globalization has facilitated cross-border property investments making it easier for overseas investors to access domestic markets.
However, for those looking to invest in local markets as a long-term strategy, localization remains just as important as ever. The best way to make sure you’re investing in the right local markets is to work with local experts, such as property investment experts, who have their pulse on the local property market.
Rise of Fractional & Socially Responsible Investing
In the future of real estate investment, we can expect a rise in the popularity of fractional investing. In this model, investors will be able to buy a fraction of a property, rather than investing in an entire property outright. As well, socially responsible investing will continue to shape the real estate investment landscape. Investors will increasingly care about the cultural, environmental, and social impacts of the properties they invest in.
The Demands for Housing & the Rental Market
The housing market worldwide is under significant pressure due to a shortage of properties. With rising demand from first-time buyers, investors are taking advantage of the shortage by expanding and improving existing rental offerings. Many millennials are going down the rental route rather than buying, as it presents a more affordable and flexible option, driving the demand for rental units.
The COVID-19 Impact
The onset of COVID-19 may change the real estate investing landscape for years to come. The pandemic has shifted the focus to health and safety, where properties that can offer outdoor areas and more space have become more desirable. The crisis has also accelerated some trends by bringing online technologies more to the fore. Given the unprecedented circumstances, real estate investors will need to adapt to the changing environment, particularly in their approach to rent payments and tenant management.
The Impact of Interest Rates
Interest rates are always a hot topic, and for real estate investors, the rate has a direct influence on property value. When interest rates are low, real estate investments become more attractive, leading to greater demand for property and consequent price increases.
However, if interest rates rise, the opposite effect is true, and that could shrink demand and lead to price drops. In the current economic climate, it seems likely that interest rates will remain low for the next few years.
Sustainability and Energy Efficiency
Sustainable and energy-efficient properties are here to stay. Nowadays, customers care about the environmental impact of their properties and want to live and work in sustainable buildings. Among the recent advances, energy efficiency is a priority because of the impact it has on both the environment and household expenses.
Retrofitting properties with energy-efficient features will continue to be a popular trend, with more funding made available for such projects. Investors specializing in these types of properties can also expect better returns compared to those without green credentials.
As with other industries, the sharing economy has started to affect the property market, with the As-a-Service model helping homeowners create entirely new revenue streams. “Property-as-a-service” presents an opportunity that offers hotels a run for their money as they offer more unique and creative accommodations. Following pandemic-related travel restrictions, the industry has recorded increased popularity, and it’s set to grow more popular in the coming years.
Adapting to the Trends
For those looking to invest in real estate, it’s essential to stay informed about the latest trends and changes in the market. To capitalize on the latest trends and adapt to the changing market environment, investors need to constantly evaluate the real estate investments they make.
Partnering with real estate professionals can provide valuable insights that set up a portfolio for long-term success. With the challenges brought about by the economic fallout caused by the pandemic, taking a conservative and defensive approach is more important than ever.
The real estate investment landscape is continually evolving, and it’s essential for investors to take note of the latest developments in the market. From technological advancements to global and local trends, social responsibility, and adaptations brought about by pandemics and our ecological responsibility, keeping track of these trends can help maximize investment returns in the years to come. By investing in a well-diversified portfolio that is aligned with the above trends, investors can reap significant returns on their investments.