For a real estate investor, it’s essential to research what the real estate market might offer in the near future. Extensive research allows an investor to adequately prepare for the opportunities and risks that are likely to arise throughout their career. Each year new trends emerge in the real estate industry.
In 2019, the real estate market saw an increase in investors in both residential and commercial sectors. Analysts expect this growth to continue well into 2020 due to an influx of small-scale real estate investors and government investing. Here are five significant real estate investing trends we predict will continue into 2020.
Global Expansion in Real Estate Investment
Heading into 2020, we are likely to see more real estate investment opportunities due to emerging economies in other countries. These developing countries, many in Asia and Africa, have shown positive growth in real estate recently. Market analysts predict the real estate market in many developing countries will continue to expand in 2020. More real estate investors will gain a chance to join the massively-growing real estate industry, fostering more investment and employment opportunities. Because of the geographically diverse nature of these expanding economies, investing opportunities will be found all around the world, creating a truly global real estate market.
High-Yield Investments in Burgeoning Cities
In already-advanced economies, splashy investment opportunities will not be as common. The yields in advanced economies are likely to be low, but the risks will be correspondingly low as well. Real estate investors are likely to shift to fast-growing cities located in emerging economies. In emerging economies, the risks will be high and so will the potential yields. In 2019 we saw social migration to the emerging economies; this will continue well into 2020 and beyond, resulting in the most extensive construction surge the world has ever witnessed.
Government and Market-Force Collaboration will be Crucial
Real estate markets contribute substantially to the world economy. In response, governments continuously seek to control and safeguard those contributions by increasing real estate regulation. Government-run institutions will continue to provide a means of investment in increasingly stringent conditions, making it vital for real estate specialists to work closely with government agencies. This interplay between governments, government-run agencies, and private market forces will become especially important in emerging economies, where governments are often major players in the development of urban infrastructure.
Technology and Innovation
The increasing application of technology to the real estate market will result in the success of some real estate investments, but the downfall of others. The key difference will be in the degree to which investors adapt to the use of technological innovations in real estate. Architects and developers will become increasingly innovative with both residential and commercial real estate to maximize the use of space. Construction techniques such as Prefab and likely 3D copying will also be used. Each of those developments will create new opportunities for real estate investors to capitalize on an ever-changing market.
Increase in Competition for Prime Properties
There will be an increase in competition for prime properties in emerging economies. In order to achieve the best returns, investors will be forced to choose between increasingly expensive “sure-thing” investments and developing higher-risk properties in these emerging economies. The choice may also force investors to seek out under-invested sub-sectors, such as the retirement market.
These are five real estate investment trends for 2020. They are certainly not the only five trends that will emerge, but they form a good starting point for savvy investors to consider as they move forward.