Residential property trends have slowly changed due to demand and supply dynamics. On the supply side, it is pushed by the revolution of technology. On the demand side, factors such as affordability, sustainability, and safety have played a significant role in defining the residential market.
Residential real estate is driven by affordability. There are increasing costs of construction materials, reduced access to finance, and diminishing household incomes. There is migration to cities by young people in search of jobs coupled with increasing unemployment rates. This creates an affordability crisis where the working class is not able to afford available accommodation. In order to mitigate this crisis, most urban dwellers have resorted to co-living.
The evolution of co-living spaces has introduced new aspects that meet the desired lifestyle of the younger generation. Occupants are electing to share accommodation that they would typically not afford. The accommodation usually has features such as caretakers, internet, swimming pools, and modern furniture.
The need for safety and security is also likely to influence the outcome of residential property in the future. Increasing crime rates especially in urban areas have resulted in the fear of crimes such as burglaries, kidnappings, robberies, and hijackings. The insecurity that comes with the fear of crime has led to the increase in demand for gated estates. Gated estates provide a sense of safety, security, and accountability as they have controlled access. Kids can play outside and interact with nature while the adults have peace of mind about the safety of their property.
Living in a gated estate will not only be about the safety and security but the sense of community and the amenities they will offer. Residents enjoy being surrounded by like-minded people as this allows for easy cooperation and social interaction. Thus more people will lean towards gated estates as they facilitate neighborhoods that are oriented around, like-minded people. These communities frequently have social functions, entertainment events, and educational groups that foster a sense of community.
The change in climate and the need for humans to reduce their carbon footprint have resulted in homeowners becoming much more environmentally conscious. For some, this comes as a necessity to try to reduce expenses in the home such as water and electricity bills. Energy prices are steadily increasing year by year, and with a growing population, the demand and costs for energy are only set to increase. In order to save costs in the long run, home buyers will resort to sustainable buildings.
Incorporating energy-efficient systems throughout your home will noticeably cut the price of bills, and the initial setup cost will soon be earned back through the savings you’ll make.
Additionally, the remote working trend is likely to shape the future of residential real estate. The pandemic has taught us that not all of us need to be in the office to work. Most jobs can be carried out from anywhere at any time as long as there is internet connection and a phone. Some people will want to return to the office, while others will prefer working from home, and yet others will want to work outside the home, but perhaps not commute downtown.
The result will be a dispersal to the semi rural villages which are close enough for a weekly visit to the office. Those that will move to these villages are likely to demand larger dwellings because they want more space to fit their home office either in a separate room or space for a desk.
On the supply side, technology is certainly changing how residential property will appear. The urgency to deliver housing swiftly and effectively while ensuring profitability has catalyzed the evolution of technology in the construction industry. This will slowly change how developers and contractors deliver residential property. A good example is the use of paper drawings to convey housing designs, this then gave way to CAD designs over the years.
As of late, advanced countries such as Rwanda, U.K, France and China have progressed past the use of CAD plans into Building Information Modeling (BIM) and other countries such as Botswana are likely to follow suite. BIM helps real estate stakeholders incorporate visual data with the information relating to project particulars, material necessities, project functionalities and property support, loaning an upper hand through better operational effectiveness. Only few players have adopted this however the expectation is that more companies grasp the value that these bring.
The problem of inefficiency and inaccuracy has resulted in real estate being more data driven, especially on the supply side. For developers to predict which markets are performing better than others, data has to be available through transactions. However, humans can not go through all the data and analyze it individually as this would cause a lot of errors. Generally, most statistical analysis was based on sampling data sets from the entire population. More developers will incorporate machine learning and big data to reach conclusions based on the entire set. Helping them predict hot and upcoming neighborhoods.
A confluence of factors were identified and how they will affect the future of residential property. Among them was the need for affordability which will result in co-living spaces, while safety and sustainability will lead to more gated estates and eco friendly homes. Homeowners will move to the suburbs as a consequence of remote working and the need for more space. On the other hand, industry players will also be forced to adjust in order to stay competitive. Architects and project managers will have to move away from CAD to BIM as a way of incorporating visual data with the information relating to project particulars. Developers, investors and finances will also have to switch to the use of big data and machine learning to predict hot and upcoming neighborhoods.
When I imagine real estate over the next decades, I see young people who live in major cities resorting to co-living for affordability purposes while those who want the highest form of safety will opt for gated estates. Sustainable and eco-friendly homes will be very popular among people and so will the need for spacious homes. Project managers and key stakeholders will be utilizing BIM during all stages of the project lifestyle. On the other hand, developers, investors, and financiers will also have to switch to the use of big data and machine learning to predict the performance of different markets in different locations.