Latest Trends in Global Real Estate Markets

Real estate markets around the world are changing rapidly due to the evolving economic, demographic and technological landscape that is affecting the availability, the price and the architectural design of both commercial and residential properties. As a result, the global real estate landscape is being altered in a way that has never been seen before. Hence, it’s important that we understand these changes, in order to make smart investment strategies in the near future.

1) Commercial property trends that are on the rise across the globe

The commercial property market is set for a healthy rebound in the coming five years, after experiencing an incline due to the credit crisis. Improving the financial situation in emerging markets, largely thanks to lower unemployment rates and increased construction, will help to grow the global real estate landscape in the near future.

A. The rise of flexible office spaces

One of the most notable trends to gain traction in the international commercial property market is the rise of co-working and flexible office spaces, largely driven by the changing economic conditions and the evolving nature of work in the modern world.

B. Strong demand for logistics space

The demand for all types of logistics spaces, including warehousing, is expected to show a robust demand despite increased supply of properties to the market. The growing demand is also expected to affect rental prices on such properties through the remaining part of 2018.

C. Retails looks for new ways to differentiate

In many markets across the globe, the demand for retail space will become selective and will focus more on existing stronger performing stores, due to most traditional retailers trimming their store portfolios. As a result, landlords will strive to differentiate their offerings to attract more retail businesses.

2) Emerging residential property trends in the global real estate market

Overall, the demand for residential properties is predicted to grow in the next few years. Both Africa and the Middle East is expected to spearhead this growth with a rate close to 4%, resulting in the construction of 11 million units, while the Asia Pacific region will contribute the largest volume of residential properties to the global market.

A. The growth of co-living and community-driven spaces

In the global residential property market, an interesting trend that is expected to gain traction is the growth of co-living and community-driven spaces, as young millennial professionals seek more affordable properties where the costs can be shared among a group of tenets.

B. The upsurge of the short-term rental market

The short-term rental market for on-demand residential properties will experience a sharp growth this year, largely thanks to the booming global tourism industry where young travellers seek to stay in ultra-affordable short-term rental properties that provide mostly self-serving facilities.

C. The evolution of micro-apartments in urban areas

The sharp rise of rental rates in urban regions across the globe has resulted in a growing demand for micro-apartment units, particularly among millennial renters who seek to live in cities, yet do not have the financial resources to obtain an urban house of their own.

3) Global real estate trends in key geographic zones

The leading geographic zones that contribute the most to the global real estate market includes the Asia Pacific region, Europe and the North American market. Changes in these regions, therefore, have a notable effect on the global real estate landscape.

A. The Asia Pacific: Real estate investors in the Asia Pacific region are moving towards value-added property investments, such as build-to-rent facilities, affordable housing, senior housing, healthcare facilities as well as data centres, etc.

B. The European market: The European Union is experiencing its fastest economic growth seen in a decade and as a result, it is expected to attract more capital from Asian investors looking for new opportunities in the west.

C. The North American Market: The North American market will primarily be driven by the growth of the real estate sector in the United States, with the new federal tax law on real estate expected to boost investor demand and improve occupier demand, for both commercial and residential properties.