While growth in the real estate market hit some speed bumps in 2020 due to the COVID-19 Pandemic, things are set to accelerate again in 2021. Many economists have predicted trends based on the various indicators of the real estate markets at their disposal. Here are the ones worth taking note of:
1) Millennials represent a significant resource of potential first-time homebuyers that is larger than ever
In the United States, 74 million millennials represent a huge demographic for first time home buyers, surpassing their parents generation, the baby boomers, where accelerated growth of first-time home buyers hit a high in the 1970’s and 80’s. Forbes estimates the average household income of millennials who fit this bracket to be $88,000 which is good enough to see more of them buying homes in the near future. Across the globe in China, 70% of millennials are home-owners and represent a huge target for the real estate market.
2) Budget-friendly homes in lower price brackets are in huge demand
The market for high-end and luxury homes has reduced with demand slowing down as well. However, this is not the case for budget homes where demand has actually increased and is experiencing stable growth, reaching levels seen before the pandemic. Due to the influx of new potential real estate buyers, families wanting to reduce their expenditure and a lack of jobs and salary cuts, this trend is expected to gain even more traction as the year goes on.
3) Second-tier cities and satellite towns are experiencing high levels of growth
As potential home-owners scout the various options available, more of them are looking towards second-tier cities and satellite towns as the real estate is often considerably cheaper than what can be found in larger cities. The same budget will consistently fetch you larger, higher quality options in these areas as opposed to large cities. Another reason is that working from home has become more common with fewer people having to commute to work and back, daily.
4) The internet is here to stay
Due to more people being stuck at home and constantly having screens in front of them, be it phones, laptops, tablets and tv’s, the amount of visual content is increasing at a rapid pace. Because of this, real estate developers are having to put more thought and creativity into ads and short videos to highlight the advantages of their projects to encourage people to choose them over their competitors. Social media has also made sure companies have to adapt to new trends to keep their audience engaged.
5) Due to the ultra-competitive real estate market, there is a constant battle between developers as to who can cram the most amenities into their projects
In today’s world, it is difficult to get people excited about projects because most people have seen it all, whether in a youtube video or in reality. The point is, facilities like swimming pools, gyms and restaurants are considered bland and more and more niche features like movie theatres, co-working spaces, infinity pools and much more are springing up in many developments in order to get crowned the amenity king of their respective city or region. Ofcourse, potential customers benefit the most as they can have their pick from a whole host of fantastic, high quality projects for the best possible price. And that is how it should be.
6) Home Staging is gaining importance
Home Staging is the process of setting up your home for sale. De-cluttering your house and keeping it simple is the best way to get the maximum possible price while selling.
Despite the rough patch that was 2020, 2021 is set to experience renewed growth, sparked by new potential buyers creating new demand and thus driving prices down and making developers step up their game in order to attract prospective customers.
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