2016 has been a year of significant social and political overhaul, but there’s also change afoot in the real-estate industry. In response to the most fascinating developments, we’re honing in on how investors can capitalise on these trends.
Cities are still key for real-estate investment. As urban living increases in popularity, the size of metropolitan regions will continue to proliferate. Megacities – ultra-dense urban areas with more than 10 million inhabitants – will multiply over the next 15 years, with the UN suggesting 90% of this growth will occur in Africa and Asia.
In the US, the current trend is an increasing preference for so-called ‘18-hour cities’ such as Austin, Texas, as opposed to traditional 24-hour cities like New York. On a similar vein, second cities in Europe, including Hamburg in Germany and Birmingham in the UK, are becoming more popular. Copenhagen, although a capital, is also seeing a resurgence, most notably for its biotech and environmental industry.
It’s still expected, however, that the bulk of millennial parents will move to the suburbs to raise children, similarly to their predecessors in the US and Europe.
The millennial generation is eager to expend its buying power. While not always equipped with sky-high budgets, members of this market are interested in purchasing at a young age. Generation Y is seen as vital in the real-estate industry as it’s willing to experiment and try nontraditional living spaces, including smaller or shared properties.
When targeting millennials as potential buyers, public transport links must be taken into account. Some studies suggest that cars are less of a priority for this demographic – at least in the US.
It’s also no secret that the global population is ageing, with Italy leading the way in Europe. This ushers in its own challenges when it comes to building and acquiring property. Open-plan design, ramps and wider access ways for those with reduced mobility should be factored in. Extra accommodation for live-in help will also add value to a home.
Residential or commercial?
The nature of commercial investment is changing, which will be reflected in the residential property sector. Shop fronts are less in demand as more retailers switch to e-commerce. Conversions from commercial buildings to personal homes are likely to be required more often.
Employees are also using technology to work remotely, so a home office is becoming an attractive feature in a residential property. If you’re attempting to sell your house, consider incorporating a flexible workspace that converts into a leisure area with ease.
What does green mean for me?
With climate change at the forefront of many national and international conversations, 2016 is the year to invest in the environment. With the likelihood of new eco-regulations cropping up and green standards becoming increasingly popular, it’s worth keeping abreast of policies in the country you choose to invest in.
Environmentally-friendly properties needn’t be thought of as a burden. These are highly sought after in the residential market, and increasingly so in the commercial sphere – especially by eco-conscious SMEs. Consider installing rooftop gardens, grass roofs and living walls, as well as systems to collect rain water.
With branches in 32 nations, Engel & Völkers has extensive expertise in predicting future real-estate trends. Browse our website for additional information on developments in the property industry.