Worldwide megatrends will alter the real estate landscape over the next five years. While many trends are now evident, there is still a natural tendency to disregard the amount of change that will occur in the future. The changing landscape in the real estate market has major implications – implications that will impact real estate development and investment opportunities. Not only will the asset pool increase, but real estate managers and investors will need to formulate radically new strategies.
According to prognosticators in the industry, the worldwide investable property market will expand greatly, leading to more opportunities, particularly in emerging economies. Fast-growing cities therefore will present a broader range of risk and return real estate opportunities. Innovations in technology and sustainability will also drive up the value in the marketplace.
The World Real Estate Market
Real estate investors will find, according to predictions, that it will become more and more important to collaborate with governments. Competition for prime assets will intensify even further, and a new and wider range of risks will surface. All this type of real estate news is as exciting as it is imperative to review. If you are a real estate investor, the future holds much promise but also much change.
Trend watchers continue to look at the property market and find that global urbanization is continuing as young people seek increased access to jobs and amenities, from shopping to healthcare to entertainment. Even some suburban locales are taking on more of an urban look, with public transportation options and a mixed use of developments.
There is less dependence on the automobile, which creates higher densities and therefore more of a metro or urban feeling. As the trend toward urbanization proceeds, it creates a large demand for retail, office housing and property-related amenities.
Global economic and certain political uncertainties also drive capital to such safe havens as the US. The property market in the US is an easy investment choice because of its transparency and stability. In 2015, for example, foreign purchases of real estate in the US climbed to over $60 billion over a 12-month period, with Norway, Singapore, Canada and China all riding the wave. Foreign investments in the US are expected to continue in 2016.
Retail Shifting in the Real Estate Marketplace
Trend forecasters also see a continued stress on retail shifting, including mixed or virtual and physical spaces and spaces that are connected with entertainment. Consumers are paying more to use credit cards, which also leads to discernment in how much they spend. The technology of retail continues to affect the real estate market as well. Therefore, analysts suggest that more weight will be given to optimizing a combination of physical in-store and virtual online shopping experiences.
Some retailers are featuring showroom-style storefronts that showcase digital spaces that offer fulfillment. Additions to the supply chain in the real estate market will be modest according to some analysts. For instance, the growth of multifamily housing in the US will show a slight gain in late 2016, followed by senior and student housing and single-tenant industrial type properties. Some commercial properties will be repurposed, such as suburban malls or abandoned large retail stores.