Nearly all business outlook reports now have a section for an increasingly powerful market segment: the millennials. Young adults born between the early 1980s to the early 2000s are included in this segment otherwise known as Generation Y. Millennials are self-expressive, innovative and receptive to new ideas and ways of living.
The rapid speed of tech advancements created young CEOs and billionaires as well as millions of millennial entrepreneurs with strong purchasing power. Companies recognize this and are hungry for ideas to tap this young, liberal and rich population.
One of the real estate trends for 2016 is the millennial buyer. California-based real estate research group Trulia notes that Gen Yers will be purchasing new homes over the next two years.
Most millennial borrowers are building up savings or expecting job raises to enable them to get their own place. “We don’t expect a big rush to jump in, but it’s going to be an incremental improvement,” Trulia economist Ralph McLaughlin said.
Here are seven trends that are shaping the real estate sector.
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1. Digital marketing and tech-savvy consumers
Emerging markets in Asia are among the fastest-growing real estate markets in the world, according to a recent PricewaterhouseCoopers report.
Southeast Asia is home to heavy internet users; it beats any other region in the world in terms of social network usage. Most industries, from retail to healthcare, are starting to shift to digital tools for their operations and marketing. The property industry is joining the bandwagon.
The internet is also the tool of millennials. If you want to engage this segment, you have to understand their digital tendencies. Real estate companies are aggressively adopting digital marketing to tap tech-savvy property buyers.
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2. The real power of data
Days and weeks of manual data assessment now takes minutes, thanks to real-time data and analytics. Access to real-time data allows an investor to do away with analysts’ professional services gathering market data.
It enables investment managers to manage their portfolio risk better and empowers real estate brokers to bypass the traditional market survey process and make deals directly to the right prospects.
Brandon Weber, founder of leasing management platform Hightower, said that using real-time market data allows property owners and brokerages to “gain a competitive advantage by making better decisions, reducing portfolio risk and operating more efficiently.”
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3. Engaging the market with the right app
According to the latest Pew Research Center report, the emerging world is catching up with developed economies regarding smartphone usage with ownership rates rising from 21 percent in 2013 to 37 percent in 2015.
The rise of smartphones has given birth to a massive tech trend: mobile apps. There is an app for almost everything, including fitness tracking and asset management.
Real estate agents are equipped with Google Maps, LinkedIn, Waze and other free tools. Property buyers and investors can easily locate properties as well as real estate agents and brokers via mobile apps. No need for extensive data gathering. With the right app, you can compare developers, projects and features anytime, anywhere.
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4. Incorporating sustainability and home design
Green trends in real estate are spreading in markets worldwide. Having eco-friendly homes is a hot trend in developed economies such as Germany, Japan and the U.S. Pollution and congestion in urban areas are boosting the demand for design technologies that incorporate health benefits and environmental consciousness.
Tara Campbell, founder of PowerHouse Growers, said: “When entering the real estate market, one should consider the building’s air, water, light and energy and to take steps to be educated on the best options available.” Some of the green trends you should explore are integrated vegetation, urban agriculture, eco-friendly amenities and green spaces.
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5. The rise of design technologies
Design technology in real estate involves the effective application of technologies in all stages of the planning and construction process. Using a drone and a program, builders can now map anything on a site, cutting down manpower, time and expenses. Digitization is set to conquer the construction industry.
Rising energy costs in key cities and the impact of climate change raise demands for green architecture especially in emerging markets in Asia and South America.
An example of this design technology trend in the Philippine real estate markets involves a building design that allows natural air and light to circulate in indoor spaces. DMCI Homes’ Lumiventt Design Technology is one of such design schemes.
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6. Coworking is revolutionizing the workplace
In nearly all growing real estate markets in 2016, coworking is gaining popularity. Coworking is not a new concept.
For hundreds of years, writers and artists have been sharing spaces for work and networking. The principles of coworking go beyond sharing an office with various freelancers. It mixes socialization and experimentation, leading to a fruitful collaboration. This scheme is gaining momentum in tech cities with lots of startups and freelancers.
“Because we didn’t have an office, we didn’t have to recruit people to come into our office, and we were able to reach out all over the world,” Jordan Schwartz, co-founder of startup Pathable said.
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7. The human touch
Will technology make real estate brokers and agents obsolete? Not likely. There will be new demands regarding amenities and services, but one thing will remain: the need for human touch in property transactions.
No app can listen (and give advice) to a landlord’s issues with a difficult tenant nor is there a software that can assure a property owner as much as a trusted agent can. Developers are putting “human touch” into the core of their apps and programs, which underscores the importance of real interactions in any transaction.
Harvard University’s Center for International Development recently revealed the most robust economies in the world including India, which is projected to expand by 7 percent through 2024.
It also mentioned China, which is predicted to grow 4.3 percent per year on average for the next decade. Other fast-growing markets are East African countries Uganda, Tanzania and Kenya.
The Philippines, Malaysia, Indonesia and Vietnam are also expected to grow between 4.75 percent and 5.7 percent. Investors also eye these destinations for real estate opportunities.
Property owners and investors should know how to capitalize on these opportunities with the help of new market trends to boost profitability.
John Anderson is a web developer, creative content director and a social media specialist. Follow him at @johnanderson090.
