The 10 real estate trends that will emerge in 2020
2020 – the start of a new decade! There are many factors which will affect the various areas of the economy, including real estate. With the forecast of a likely increase in the real estate market, agents all over the cities and suburbs, including the Surrey estate agents, can look positively towards the future.
Some trends which will emerge real estate in 2020 are given below:
One of the major factors to affect the economy and other areas is Brexit – exit of Britain from the EU. In the UK, the property market is making a slow recovery from the uncertain period of the last 4 years. As reported by Zoopla, on a national average in the UK, there was an increase of 3.9 percent in house price data at the end of 2019. This means that real estate agents in the UK can look forward to a brighter 2020! Of course, the locations are relevant, as there are some areas in the UK where the property market has dipped a bit, whereas, in other regions, it has improved from previous years.
Expansion of the investable real estate market
It is predicted that there will be a great expansion in investable real estate, not only in 2020 but in the next few years as well, which will provide estate agents more opportunities. Quoting from a chief executive of ULI, “The search for secure, stable income explains the continued strong interest from investors who are continuing to allocate vast amounts of capital to real estate, especially in comparison to other asset classes”. So this is a positive sign for things to come.
With the boost in technology, agent-buyer interactions are changing. Data is easily accessible, making clients more aware and helping them to narrow their searches for the criteria most important to them. All buildings will need ratings for sustainability, to ensure people-friendly places for residents to live in with suitable facilities in place. This may affect the economics of real estate.
Risks and return opportunities
With the urban population growth expansion, facilities for housing, shops, warehouses and office space is also increasing. This demand for increased space will provide real estate agents all over the UK, including Surrey estate agents and those in other areas as well, with opportunities for markets with low risk/low yield as well as high risk/high yield rewards.
With the growth of emerging countries, powerful real estate players and asset managers, the competition will increase not only for real estate assets but also for the management within such assets.
Climate and other environmental factors
With the UK Government hoping to hit net zero carbon in the next few decades, the plan will be to ensure that buildings and the real estate market meet this goal. Air pollution will probably become a key factor while choosing offices and places for workers to live in.
Changing work styles
Landlords have become aware of the need to adapt to changing workstyles by creating people-centric spaces, with the right mix of tenants and amenities. Some of these include electric vehicle charging and bike storage. Also, to ensure that offices are more employee friendly, which will result in extra productivity (for when a person is comfortable in a working environment, automatically the output will increase), building designs will focus more on eco-friendly health facilities, good lighting/heating systems, spaces for social gatherings and, if possible, green spaces.
Growth in urban housing
With more people moving into cities and as expenses of urban life increase, the benefits of renting homes in these city locations will probably be higher than owning homes. It is also predicted that co-living providers will look to moving out of London to other cities and there will be a growth in retirement villages offering care and amenities.
Physical space for businesses
Due to the growing public interest in wellbeing and fitness, Health and Beauty parlours, as well as gyms, will continue to benefit. Food and Grocery will also continue to do well. The sectors where online marketing has become popular (electrical, social media shopping, smart supply chains) will see a reduction in physical space. Self-storage space may provide a solution for businesses to expand without having to depend on options for large storage space.
With the improvement in market liquidity, more real estate opportunities become available, both for domestic and international investors.
Quoting from a well-known source, “With a number of real estate sectors undergoing significant structural change it is hardly surprising that many interviewees regard investing in ‘anything with a bed’ as a sound, defensive strategy at this point in the cycle, given the counter-cyclical nature of residential, supported by long-term urbanisation and demographic trends.”
Overall, the trend for real estate participants, in spite of the enhanced complexity and operational risks with evolving demands, etc., appears to be worth the trouble to achieve the desired returns.