10 Trends that will reshape the Real Estate industry
10 Trends that will reshape the Real Estate industry
In a fast-changing world, companies are in constant need of finding new ways to remain relevant. As we enter into the fourth Industrial Revolution the physical, digital and biological worlds are all fusing change the way we connect and communicate entirely.
Many talk about digital transformation; however, it becomes essential to understand that albeit the title, digital transformation transcends technology. We are quickly moving away from an industrial world where everything remained fairly predictable, manual-based, and ruled by the concept of command and control. Diving into the digital world with its sweeping changes, uncertainties and new processes, whereby everything becomes results-based and where efficient management must play a key role, as collaborative work becomes essential to turn out value-added efficiencies that will enhance said processes turning them increasingly agile.
The 4th Industrial Revolution and its impact on Real Estate
Within the next 5-10 years, everything as we know it will change: the way we displace ourselves and how we live and work will directly affect Real Estate. We must grasp that the world is growing by leaps and bounds. By 2050, the world will approximately grow by 27%, translating into a population increase of almost 2,000M people. Similarly, the population of the state of Florida will grow even more: around 30% due to migrations not only originating in Latin America, but as aging populations come in search of better quality of life.
Trends in the future of Real Estate
There are 10 major trends currently influencing the Real Estate industry. Said trends are worthy of careful attention as they impact the industry to become defining factors towards leaving a better world for future generations.
Our first trend is purpose. Real Estate used to be defined as the conduit to sell or rent homes, offices and commercial spaces. To be able to innovate in the sector, we must now modify our perception about the industry from the cold and concrete definition to a more open, human one of purpose and where Real Estate manages all transactions where lives happen.
Now more than ever, life evolves in many ways and forces changes in the customary use of things. For instance, it is plausible that as the use of autonomous vehicles becomes widespread, parking lots may become less necessary, entirely pushing a new change of space function. This conversely, would impact other services derived from the sector such as auto insurance. Therefore, redefining Real Estate purpose will be decisive in view of a challenging future filled with innovation across different areas.
Other significant issues such as population and diversity directly impact living spaces and define how we live. Work and life balance, where mobility becomes a key variable of our quality of life and Community that will determine not only how we work, but in shaping new leadership as well.
In fact, the burden lies in the Real Estate community to spearhead and inspire the development of the modern world.
Another trend is access. As the physical world becomes increasingly complex, mobility is frequently limited due to the high density of populations, thereby generating new models of virtual access to work and to access to educational institutions. New constructions will, therefore, require access to modern means of transportation, logistics, and communications.
Technology without a doubt becomes a significant player in such transformation. Let’s take a look at the various ways in which technology is changing the sector: Artificial Intelligence, applications, data analysis and the Internet of things. There is a group of technologies that unite the real with digital worlds, where “digital twins” emerge, as is the case with buildings that may have a digital counterpart or mirror image allowing them to share and optimize the use of energy and other resources. In this group, there are as well conversational platforms and virtual reality. Finally, mesh technologies such as Blockchain, transforming form and transparency in businesses and processes and directly impacting the Real Estate professional. As transparency systems are increasingly adopted, Real Estate professionals will need to have the ability to adapt, learn and become comfortable and proficient with those emerging technologies.
As new investment models have grown exponentially in the last five years, substantial investments propelled by new business models such as AirB&B and WeWork, will turn into crucial factors in the purchase and lease of real estate. All such emerging forms of investment will continue to impact not only Real Estate but other complementary industries as well.
A new balance will arise, stemming from the fusion between the digital and real world.
On one hand, many brick and mortar stores are moving into the digital space or evolving into care and entertainment; while on the other, Amazon is establishing physical spaces such as AmazonGo, as others follow suit and thus, a new balance emerges. All these changes arise with new sets of challenges and opportunities. The World Economic Forum’s Future Report on the “Future of Work” indicates that 75 million jobs will disappear, while 133 million different jobs will reemerge, all impacting said new balance.
Another high impact trend is the combination of sustainability, zoning, and new financial models. Said synergy gives way to PPPs or Public-Private Partnerships and B corporations, opening doors for development in areas in need of sustainable projects at the social and environmental levels.
Finally, we have obsolescence. Everything is changing at a fast pace: the way we live and work and what we do in general. Everything will reinvent itself not just once, but several times in the next few years. A key question for the sector is how to make Real Estate evolve with us, and which way we intend to approach, rethink and adapt on how we do things to avoid said obsolescence, turning such urgency into everyone’s job!
Future of the Real Estate industry
The opportunities for the Real Estate industry are truly astonishing, but so are the tremendous changes and challenges that will ensue as things evolve increasingly faster requiring greater levels of professionalism and willingness to learn and adapt on the part of real estate agents, markets, and associations. Therefore, it becomes essential that the Real Estate sector remains consistent and committed to the purpose and the responsibility it bears towards the future, requiring the industry to adopt a shared common vision to become a leading sector in this process of transformation and innovation, as well as an effective agent of change to attain a better world for all to inhabit.