By Laila Waqar
“Buy land, they’re not making it anymore.” – Mark Twain
The real estate realm is constantly changing due to social, cultural and technological changes. The real estate trends that helped experts make successful predictions in the past are not fruitful in the present. While it is an open secret that real estate trends are shifting, experts are still debating the impact it will have on people and businesses. These developments can have both positive and negative impacts on real estate.
Graana.com brings you an overview of opportunities and challenges faced by the real estate sector in 2021.
Changes in Modes of Mobility
Changes in modes of mobility present tremendous opportunities for the real estate sector. With advances in technology, people are moving towards sustainable living. The availability of the internet and the plethora of work options that are available as a result are increasingly changing the employment dynamics. Work from home is becoming more culturally acceptable. With a laptop and stable internet connection, individuals can achieve their work deliverables from remote locations.
Moreover, the mushrooming of food delivery outlets have also enabled people to be more mobile. These changes have a significant impact on real estate properties including retail and dining. Commercial properties are also changing as people are increasingly reverting to shopping online. Real estate investors may want to assess the changing dynamics and adopt changes in investment models.
Internet-based Interactions
Another opportunity faced by the real estate industry is internet-based interactions. Social and commercial interactions have shifted online which have led to a decrease in interest in conventional commercial developments. These traditional facilities are being replaced by logistics infrastructure.
Businesses will focus on creating experiences. With online interactions taking over conventional interactions, cities will be redesigned to incorporate residential mixed-use developments such as speciality stores, open-air markets, cafes and restaurants. This means that public and commercial spaces will increasingly have recreational facilities to allow for more social interactions.
Demographic Alterations
Health care is improving which extends the life expectancy of citizens. The ageing population is seen as a positive development by real estate analysts. A greater proportion of the ageing population will impact the way cities and urban centres will be designed.
For example, urban spaces will be developed in a way to incorporate more green spaces and recreational activities for the elderly. Moreover, public spaces will be designed to have wheelchair access with additional seating.
Climate Change
The greatest threat to the real estate sector comes from climate change. Experts say that the coastal areas will be affected significantly by the emerging climate change and will consequently impact real estate investments.
Pakistan is one of the worst-hit countries when it comes to climate change. With the glaciers melting, the crisis has been bestowed upon the country sooner than it can be rectified. This makes investments near the glaciers or coastal areas a risky investment.
Regulation
The general perception is that even though regulation is supposed to regulate the market and encourage economic growth, it is unaccounted for consequences that hinder its true potential. For example, rent controls may prevent a property from being listed due to cumbersome requirements.
Although well-intentioned, excessive controls can prove to be detrimental. In the former example, controls result in properties being listed for lower prices, which reduce housing supply and eventually exacerbates the affordability crisis.
Laila Waqar is a Content Specialist at Graana.com.
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