In our previous article, we share statistics and insights that make us optimistic about the rebound and the progression of Greek and especially the Athenian real estate market. Now is the time to think globally and talk about the most prominent real estate trends that will reshape and push the industry to new paths and heights nationwide.
1. Tech Giants Buying Their Way in the Market
The last decades, tech giants like Google, Amazon, Apple, and Facebook redefining our world and the way we do business, by reshaping every industry. Of course, real estate could not be an exception to this war of domination.
For them, one common thing in recent years has been the large investment in real estate programs aimed at tackling the cost of affordable housing and developing such communities nearby to their headquarters.
For example, both Facebook and Apple are investing $1bn and $2.6bn respectively, in affordable housing plans in Silicon Valley, California, focusing more on middle-class and upper-middle-class housing.
In 2018, Google's parent company Alphabet invested $1.5 million in an AI-enabled prop-tech company from England, AskPorter. That same year, Amazon vigorously claimed its share of the real estate market, investing $6.5 million in Planet Prefab, a startup that promotes sustainable housing development.
Also, other important players are already making their moves towards this particular market. Airbnb launched the "Backyard" initiative, which focuses on developing low-impact homes, and Siemens has announced the largest investment of its long history - Siemensstadt 2.0 (Siemens City in Berlin), a project that will serve as a benchmark for German technology and manufacturing.
2. Prop-Tech Developments
Inextricably linked to the pioneers of technology that shape the world above, developments in prop-tech are pushing the real estate market forward as they offer new opportunities and pose new challenges to realtors worldwide.
In the next two paragraphs, we will briefly present two developments / technological trends that are radically changing the real estate market, as the impact of technology on the industry is a large chapter in which we will go deeper into a separate article.
Maybe the most prominent trend deriving by these progressions is the mainstream concept of Smart Buildings. This concept has an increasing tendency, as the consumers today are educated by markets and technological advancements to make the most out of everything, with the minimum cognitive effort and with the lowest cost possible.
The other development that will completely change the real estate market, as it has already done with every other major industry, is the powerful concept of big data or big data analytics.
Although real estate experts are struggling to assimilate and integrate data analytics processes into their operations; AI and Machine Learning technologies will help them harness the power of enormous amounts of datasets and eventually develop advanced personalized services and automated processes.
Overall, technological developments will affect the real estate industry and professionals in one way or another, as they will be beneficial to those who adopt these changes or be destructive to those left behind.
3. New Living Models
- Co-Living Concept
Today, home prices are sky high in urban areas, even in markets that were previously considered cheap or affordable. The great global recession started in 2008 and has caused wage squeezing, globalization and the rising levels of urbanization around the world, are just some of the reasons that drive people to this inability to cope with high rental and sale prices in central areas.
In the report "Emerging Trends in Real Estate 2020" conducted by the PwC and the Urban Land Institute, there is a special reference to the over ward-trend of the Co-Living model and the reasons behind this rise. Anita Kramer, Vice President of the Urban Land Institute and co-author of this particular report, says "co-living arrangements are a great way, especially for younger generations, not only to cope with rising prices but also to revitalize their sense of community, something that was simply lost to them because of technological isolation".
- Hipsturbia: "From Downtown to Vibrant Suburbs"
The same report, identifies another key trend that transforming the real estate market which is inextricably linked to one of the most famous and dynamic demographic segments across markets and industries – Millennials.
The whole idea is that as people of this smart and energetic generation grow up, become parents and seek to settle down, they begin to look for more affordable accommodation options outside their favorite city centers without abandoning their "live/work/play" lifestyle. Thus, in line with this trend, modern suburbs that offer good public transport, are within easy reach of city centers and have a variety of options in terms of restaurants, pubs and retail stores become the new hot zones for realtors.
4. Community Mindset
Using the word "community" or promoting a "sense of community" is nothing innovative in the real estate industry.
How many times have we talked about "community development" and/or "working with the community"? - But let's be honest, most of the time it was something that comes from marketing strategies/theories that treat people exclusively as customers.
However, following the same framework as Co-Living and Hipsturbia, there is a growing demand for organically shaped communities that share common ideas, values, and activities in addition to sharing common areas or neighborhoods.
Over the last decade, big companies and their office architects have been the first became aware of this new idea and its benefits. They began moving from the "private office model" to "bright and spacious shared workplaces", reinforcing solidarity, collaboration, and a better work ethic. So now it is as obvious as ever that the Community State of Mind / "isolation-free buildings" - is here to stay and extend to the entire real estate market.
5. ESG: Real Estate Investments under Ethical Values
Over the last decade, sustainability and social responsibility have become social norms of modern societies. That becomes even more apparent if we take into account that institutional investors worldwide take their decisions by examining multiple sustainability indicators.
In addition, Millennials and Generation Z's strong interest in environmental, social and governance best practices is an important factor driving this trend.
Naturally, these are just some of the trends that are reshaping the real estate market worldwide. However, at Divine Property we weigh them to be some of the most interesting ones for ourselves and certainly for others in the real estate market that are equally inspired and motivated with us...