As we enter the month of December, it’s time to start summing up 2020 in real estate. My name is Ofir Eyal Bar, and I’m a real estate investor with over two decades of experience around the globe, especially in North America, Europe, South Africa, and the Far East. Let’s talk about top trends in real estate this year — the trends that are going to stay with us for quite a while, or so it seems. And no, we’re not going to mention COVID-19 even once (and that’s not going to be easy).
After decades of a continuous shift to urban-oriented living, we finally see a certain slowdown and even a reverse effect in some spots on the globe. Countryside real estate’s popularity is on the rise, and there are a few possible explanations for that. The main one, naturally, is the search for ways to improve the quality of life. You can’t argue with the fact that rural living is more serene and peaceful than the hustle and bustle of the city, and that it may even lead to a healthier lifestyle overall. However, this explanation doesn’t answer one important question: why now?
The answer to this question isn’t as optimistic, and it has to do with pricing. In some cities around the world, a normal apartment has become unaffordable for even those who earn an above-average monthly wage. Thus, people are moving away from cities in order to save on costs, and the increased daily usage of suburban public transportation is proof of that. This also means that unless real estate prices in urban areas drop (and they probably aren’t going to anytime soon), more and more will choose to live in the countryside within driving distance of the city — and that it may be wise to invest in property there today since prices there will rise as well.
Real estate assets today are built with the intention of being multi-functional, and that’s been true for quite a while now. In order for an apartment complex, for example, to fulfill its true financial potential, it needs to serve as a commercial center on the ground floor or perhaps include some offices adjacent to the penthouse. There’s nothing new about that, though.
What is new here is that we’re witnessing all kinds of attempts at allocation combinations we haven’t seen before. 2020 saw the construction of buildings serving as shopping malls while housing a luxury condominium as well. Another combination we see more often these days is office buildings with a small park or garden included in their plans. It may be too soon to determine whether these ‘experiments’ are worth investing in, but if you are willing to take a risk and trust your sense of judgment, some of them may at least be worth considering.
Going socially aware
I, Ofir Bar, am actually quite surprised it took so long for ‘socially-conscious’ housing to become trendy, but 2020 saw a rise in ethical and moral reasons playing a role in people’s decision where to live. One example of this is called ‘green living’. While the term is very vague and the privilege to call your house or apartment eco-friendly comes with a hefty price tag, many people (naturally those with larger incomes) are willing to pay more for environmentally-friendly living.
That’s not all, however. Being socially conscious also means choosing a property that blends in with the community and the neighborhood around it — and finding a unique way to contribute to it. For example, many new housing projects include some sort of area destined for the benefit of all, like a park, a sports and recreation center, a playground, and so on. My guess is that people purchasing this kind of real estate are looking for a way to feel better about themselves and that they can afford it. Bottom line: This is a recommended investment, while it may not be cheap since it tends to attract wealthier tenants and prices are on the rise.
A look into the future
It wouldn’t be far-fetched to assume that these 2020 trends will also be popular in 2021 as well. However, before setting out on your next investment venture, I’d recommend consulting an expert in the field. Try to choose someone who is local as well, since they tend to be more connected to the reality in the area you are looking to invest in. Feel free to turn to me Ofir Eyal Bar LinkedIn account for some more useful advice. Good luck!