As summer turns to autumn, the end of 2020 is in sight — a tumultuous year, with change unlike anything we’ve seen before in our lifetimes.
From pandemics to politics, the world has seen significant changes in 2020, and the real estate sector is no exception. With 2021 just around the corner, many in the real estate industry are wondering: what’s next?
Read on to learn what the answer to that question might be with a look at the possible future of real estate.
Technology: online mortgage brokers and property search engines
The idea that technology is dramatically changing our lives is not a new one. From ecommerce and marketing to healthcare and logistics, virtually every aspect of our lives has been impacted by new and rapidly evolving technologies.
So it should come as no surprise that real estate is also being changed by technology. A plethora of tech startups and enterprises have turned their attention to real estate. Often rife with red tape and protracted procedures, these businesses turn what is a notoriously stressful ordeal into a streamlined, smoother process.
Take Breezeful, for instance. In the same vein as other comparison sites, the online mortgage broker offers buyers the opportunity to trawl a number of different lenders to find the best, most competitive mortgage rate.
Even the process of finding a property in the first place has been transformed by technology.
Property websites like Zoocasa effectively act as a property search engine, letting prospective buyers filter houses and apartments in their desired area based on price, bedrooms, and even amenities such as fireplaces or garages.
These are just two examples, but are the tip of the real estate technology iceberg. Such developments offer buyers a unique, personalized experience with the chance to reduce costs (and stress) into the bargain.
COVID: a changing real estate landscape
Just as technology has impacted virtually every industry, so too has the ongoing coronavirus pandemic. With the economy in freefall and consumers tightening their belts, house purchases slowed during the first few months of COVID.
While house prices fell slightly as a result, it should be said that prices are not going to plummet to rock-bottom prices — yet. Those buyers who were looking to buy pre-COVID are still looking, and for those renting or living in shared properties, the thought of a second wave spent in their current abode might spur them on further.
That said, it’s not out of the question that, in a few months’ time, the real estate market could hit a rough patch. With many consumers’ savings impacted, and many more potentially made redundant, the prospect of buying a house might seem like the last thing on their mind.
With such a prospect on the horizon, there is a chance that house prices may fluctuate again. But the future of coronavirus is uncertain, and so too is its impact on real estate.
Generation Rent: flexibility and freedom
On the surface, renting seems like the less-preferable choice when compared to actually purchasing and owning your own property. Why pour money into rent when you could be paying it towards your own mortgage?
But for many young people, renting is a more attractive choice with greater flexibility.
The financial disruption of the last decade — recessions, stagnant wages, and so on — combined with an increasingly uncertain job market, has made younger generations wary. The ability to up sticks and move elsewhere gives young people freedom, and any future financial crash won’t impact their assets, property included.
Indeed, even for those who do want to buy a property, soaring deposit prices mean this is out of the reach for many young workers. Most young people on the property ladder are only able to afford a deposit with financial assistance from family, or from years of saving and spartan living.
There is one caveat to all this: while many young people flock to the city for jobs, the increase of remote working means this isn’t necessarily a requisite for a decent job. House prices may therefore increase as workers look to live somewhere they like, rather than are forced to.
The points above are just a few ways the real estate industry might change in 2021. Of course, nothing in life is certain — this year attests to that. But they offer some insight into the future of real estate, one touched by technology, financial uncertainty and, of course, the ongoing impact of COVID.