Three emerging factors are set to disrupt and transform the real estate market in the near future, according to a new report by Montréal-based real estate website Shupilov.com.
Remote working and self-employment, disruptive technology such as autonomous vehicles and virtual reality, and lack of affordable housing are the three key trends that will affect the real estate market next year and into the future, said the report.
Home as office, business or service
The blurring of live-work boundaries and changing social needs are affecting the kinds of homes buyers want, especially as more and more people work remotely or are self-employed, according to the report.. This creates a need for work spaces in the home, whether that’s home office space or a live-work unit. Added to that need is an increased desire for homes – or spaces within homes – that can be rented out as short-term rentals on websites such as Airbnb.
“Builders are seeing more demand from the self-employed – who prioritize loft-like spaces that easily convert into home offices and workspaces – and Airbnb hosts – who prioritize ‘socially-focused’ architectural design such as open-concept living spaces and common areas, as well as smart security technology,” wrote the report authors. “‘Experience-based’ architecture is what provides leverage to real-estate-as-service companies such as WeWork and Airbnb, where design is carefully curated in response to particular demographic lifestyles.” (Check out the 'Smart Thinking' article on page 24 of the latest edition of West Coast Condo for more on smart homes.)
Remote working also means that there is less of a need to live close to downtown cores, and buyers may choose to gain more space in homes further away from urban hubs.
The trend of moving further out of city centres could be reinforced by another of the disruptive technologies affecting real estate – the emergence of autonomous vehicles.
The report said, “As self-driven cars reduce ease commuting time and the burden of gridlock, will suburban living become more popular among the younger generation? Better connectivity in urban transportation may, in coming years, shift buyer desirability in favour of larger spaces, further away from the city core.” (More on the potential impact of autonomous vehicles on real estate here.)
Another major technology affecting real estate is virtual reality. Already being used to allow buyers to remotely view properties for sale or as-yet-unbuilt new homes, the use of VR could be expanded in future to let owners redesign their homes to suit their needs, said Shupilov.com. “In the future, the same technology could conceivably be used as an interactive way of allowing consumers to participate in the design of their living spaces, providing highly tailored end products at a residential or retail level.” The report also predicted that 3D printing could play a role in this home design and product tailoring, with the ability to create one-off products in a cost-effective way.
The affordability factor
The final major factor that will hugely affect real estate in 2019 and beyond is already here, and that’s affordability, or lack thereof. With the cost of housing in major Canadian urban centres having soared in recent years, and even with some market correction unlikely to return to its former values, the market is forced to respond and adapt.
This largely looks like a continued dominance of the condo market, with many buyers priced out of the single-family and even townhome market, according to the report. But even within the condo market, which is itself much more expensive than a few years ago, innovative solutions will be needed to make or keep homes affordable.
“The condominium market speaks to the affordability crunch, and has topped sales statistics in most Canadian cities this year. In 2019, condominium developers will need provide unique products in response to competition, and find innovative technologies that will help reduce cost at the construction and administrative level.”