The real estate industry has undergone immense transformation over the past two decades, but a number of significant and influential emergent trends are poised to further revolutionise the sector and the way in which we live. Influenced by a multitude of factors and operating in regular cycles, the real estate industry has always been one of the most dynamic, but in recent years the changes have become progressively dramatic with the next decade poised for even more significant transformation.
“Two decades ago, the way that top agents best serviced their clients was by being experts in their local markets,” says Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty. “But these days a thorough understanding of your market is no longer enough; it’s also essential to be au fait with fast changing current and emergent global trends in order to retain the edge in an increasingly competitive market.” She believes that the following are the key global trends of which property professionals need to keep abreast:.
1. Urban expansion and the growth of second tier cities.
The growth of existing cities is likely to be most prevalent in emerging economies, namely Asia (currently the most fast-paced region), Africa, the Middle East, and Latin America. In developed economies, we will see significant growth of second tier cities as more and more people are forced to look for better value as a result of continually rising prices in first tier cities. This is already becoming an established trend in the US where major companies are moving metros. For instance, Toyota has relocated to Dallas from Southern California and Apple is opening a billion-dollar campus in Austin. In South Africa we are seeing the same thing happening in fast-expanding hubs like Midrand which is now home to a growing number of blue-chip headquarters including Deloitte’s and PwC, both of which have moved into the prestigious Waterfall precinct.
2. Changes in government policies and economic growth
It’s not only in South Africa that changing governmental policy and economic growth are key influencers, but their local import has been especially significant in recent years with a number of contentious land-related policy change proposals and a dramatic economic downturn. In other countries like the US and the UK there have been notable changes to tax laws relating to property. Although we have little control over political and economic policy decisions, a thorough understanding of them will allow us to plan better and make deals which offer more than one exit strategy to safeguard ourselves and clients.
3. Shifting demographics
With life expectancy today higher than it has ever been, it’s predicted that by 2050 the global percentage of people aged over 60 will exceed that of those under 15 for the first time. They are also more vibrant and active at this age than the generations before them and therefore have very different property requirements for their golden years which will have a notable impact on the industry, especially in developed economies. Most are looking to extend their independent lifestyles well into retirement and when they do give up the family home they tend to prefer to move to multi-generational communities, preferably with amenities and easily accessible healthcare facilities. Globally, there is also a growing middle class and by the end of next year, it is estimated that the world’s population of middle-class consumers will have increased by one billion.
4. The millennial market share
Millennial home-buying is expected to peak next year, after which this generation will represent the largest share of the market for the next decade. Not only will their first home aspirations push up single-family home prices in many markets, their unique lifestyle needs will continue to shape all aspects of the industry. The lines between living, working, and playing are already blurring, which is clearly evidenced by the growing prevalence of ‘hipsturbia’, mixed-use suburban nodes near major metros.
5. Alternative living
Co-living, especially in and near the most expensive metros, is on the increase. This is most prevalent among millennials and, at the other end of the spectrum, where the ageing population is growing and accommodation and healthcare costs are rising. This is also becoming more common in the workplace, with a report published by WeWork in October last year revealing that in London co-working is fast becoming an established trend with 17% of offices now on a flexible basis.
6. New technologies:
For a number of years now, smart home technology has been regarded as the ‘next biggest thing’ but it’s now becoming increasingly common in both renovations and new builds and many homes are already run by Alexa or Siri. The new watchword during the next decade is likely to be “accessible homes” and real estate developers and investors alike will be forced to consider the growing smart home robotics sector which includes features and appliances like vacuum cleaners and mobile assistant robots. This will require spaces to be more open plan with fewer stairs and floor finishes which are conducive to wheels. In the industry itself, technology will continue to transform the way in which we do business as highlighted by recent KPMG research which revealed that awareness of the impact of technology on the real estate sector has increased. The number of proptech solutions has also grown considerably in the past few years, resulting in the emergence of a true proptech jungle.
7. Green is still the new green
Sustainability is becoming ever more challenging and this is unlikely to change considering the projection that by 2050, the world will need 50% more energy, 40% more water, and 35% more food to sustain the growing population. It is therefore imperative that the design of all new properties is based on ‘green’ or eco-friendly principles, including renewable energy technologies and waste reduction. Geffen concludes: “When you consider the fact that real estate is already subject to an expansive number of extraneous influences like interest rates, housing prices and other economic trends, having to factor in a growing number of emergent trends can seem daunting. “But, as the great philosopher, Socrates, said: “The secret of change is to focus all of your energy, not on fighting the old, but on building the new.”
There can be a lot to consider when selling your home, but there are benefits to listing your home for sale. From freeing up equity, to up or down-sizing and improving your lifestyle. Here we’ve compiled a handy house seller’s checklist to help you navigate through the selling process.
Choose a sales consultant
The first step to selling your home is to engage the right sales consultant for you who is going to achieve the best result possible for your property.
Prepare your home for sale
The next step to prepare your home for sale. This means it’s time to make sure the home is neat and tidy, and free of clutter. It’s also a good time to make any necessary repairs on the home that could detract from the sales price. You may also like to have your home professionally styled for open homes, so that potential buyers can see exactly what can be done with the space.
Price your home for sale
The most difficult task for most sellers is determining the value of their home. This is where your sales consultant can really add value for you. Sales consultant are armed with local knowledge, as well as market data and sales history which can help you to determine the best price for your home.
Choose a method of sale
The four most typical methods of sale are:
Discuss marketing with your sales consultant
Your Harcourts sales consultant will prepare a personal marketing plan tailored to your specific needs. Marketing your home for sale forms part of Our Promise, a written assurance that we will strive to deliver the best result possible for your property. Accept an offer At Harcourts, our commitment to you is to bring you each offer formally in writing. We will do this by providing interested buyers with a contract, and will give both you and the potential buyer the opportunity to add conditions when negotiating the sale of your property.
Complete the sale
Settlement generally takes place between you and the purchaser and your legal/financial representatives. Officially, it’s where ownership passes from you to the purchaser, and the balance of the sale price is paid to you or your financial institution. Settlement then usually occurs 30-90 days after the contract has been signed, depending on what has been agreed upon.
Harcourts would like to share some simple presentation tips with you, which may help to present your property to its best advantage. It is often the little things that can make the biggest impact. For example, first impressions really do count because it is estimated that over 50% of properties are sold even before the prospective buyer steps through the front door! These are just a few practical ways in which you can make an instant, positive impression, which will go a long way towards making a successful sale.