The real estate sector has faced serious challenges in recent years. The pandemic recovery is still underway in many markets, while economic uncertainty and political conflict continue to bring up more questions than answers for many real estate players. Collectively, these issues have changed consumer behaviour, requiring property owners and developers to mitigate risk and remain agile to market needs.
As entrepreneurs with a passion for property development will know – including Tahir Butt, London-based entrepreneur – maintaining a competitive advantage will require keeping track of global trends and adjusting accordingly.
Changing Demographics
Across the world, priorities continue to shift for homeowners and renters, especially after the pandemic and the various dynamics that period introduced. While some cities are seeing an influx in numbers – of people looking for access to amenities and job opportunities – other regions are seeing a growth in secondary and less crowded cities that remote workers prefer to live and work in.
Furthermore, certain regions are seeing their populations growing older, an aspect that will likely see increased interest in healthcare real estate such as assisted living communities and medical retail spaces. Providing for elderly citizens will become a priority for these regions, and landlords that adapt their properties accordingly will have an edge over the competition.
An Affinity for New Build Properties
Increasingly, prospective homeowners are opting to invest in newly built properties instead of older real estate. According to search data from Savills, regional reservations for new build property is trending up, indicating a desire for newer properties that are more likely to have integrated technology and use building techniques and materials that are more cost-effective than those found in older homes.
Investors are also likely to favour new homes with energy-efficient fittings, an aspect that 86% of respondents to a Knight Frank survey said was either ‘important’ or ‘very important’ when considering a property. As the cost of living is a constant factor that homebuyers must contend with as they make a purchasing decision, energy efficiency will undoubtedly remain an important assessment point.
More Opportunities Ahead
In locations such as the UK, prices dropping could create opportunities for landlords to consider additional investment options, how they invest and the regions that are predicted to have strong rental yields in 2023. Furthermore, price corrections mean that local real estate markets could become more attractive to overseas investors, continuing a trend that started in 2022.