By Ruben Pueyo | Bricksave
February 29, 2024
News > Blog Article > Unveiling five key real estate trends …
After an unpredictable few years for the real estate investment industry, 2024 looks like being another year of challenges and opportunities. In this article, we consider the five key trends real estate investors should look out for.
So far this decade, the traditional real estate model has undergone a dramatic shift, prompted by changing behaviour from property users, as well as a sudden shift in technology. The rise of remote work, the sharing economy, and the demand for flexible living and working spaces are challenging the status quo. We expect to see property developers increasingly cater to this demand, offering adaptable spaces that serve both residential and professional needs.
However, how real estate is managed is also undergoing a significant change. The introduction of ‘smart contracts’ based on blockchain technology means all property details, historical records, legal documents, and due diligence reports can be stored on the blockchain, reducing costs and streamlining processes while making essential information accessible to all relevant parties and no one else. At the same time, decentralized rental platforms are helping to redefine how individual properties are leased and managed.
Other innovations, such as the tokenization of property assets, also allow for fractional ownership and investment, lowering those traditional barriers to entry and opening up the real estate world to a much broader pool of investors.
Of course, the climate crisis is perhaps the greatest challenge we all collectively face. Progress won’t be truly innovative unless it is sustainable, and the good news is that the real estate industry is rising to meet the challenge of making buildings future-proof and sustainable.
But in 2024, sustainable real estate is no longer just about energy-efficient buildings and green spaces. It’s about creating environments that promote health, well-being, and long-term ecological balance. Investors will increasingly be drawn to properties that are constructed using eco-friendly building materials, that offer energy-efficient designs, and where people can live without making a heavy environmental impact. Examples of sustainable real estate development projects include solar power initiatives, rainwater harvesting systems, sustainable water treatment, and eco-friendly buildings and smart cities. Each project not only addresses specific issues but also contributes to the broader goals of sustainable development globally.
Similarly, in 2024, real estate investing is not just about making a profit; it’s about recognising the responsibilities that come with being an investor and committing to make a positive impact and contribution to society. Socially responsible projects often involve affordable housing, community regeneration, and developments that include social amenities such as schools and healthcare facilities. These investments are not only rewarding on a social level but are also increasingly financially attractive over the longer term, as they help develop communities that people want to live in. It’s good to see this trend is gaining momentum.
Additionally, the increased investor demand for socially responsible investments has itself led to the development of more innovative financing mechanisms, such as green bonds and social impact funds. These financial instruments attract large-scale investment from those interested in combining financial returns with positive environmental and social outcomes.
It’s impossible to ignore that 2023 was the year when Artificial intelligence (AI) went mainstream. Right now, many industries and sectors are still working out the advantages – and potential disadvantages – of integrating AI into how they work, but when it comes to property management, the benefits are already being recognised.
For example, ‘predictive maintenance’ can help to anticipate the maintenance needs of a building and its occupants, creating operational efficiencies (such as with energy usage), expanding the lifespan of equipment and saving small fortunes on upkeep and repair costs, and enhancing the experiences of the property tenants.
What are the benefits of AI for real estate investors? Well, the integration of AI helps to ensure investments are both more profitable and sustaining, reducing operational costs and reducing the risk of low tenant satisfaction and high tenant turnover. AI is a win-win all around. As the technology continues to evolve, those real estate owners that embrace AI will secure a significant competitive advantage over other alternatives.
Last but certainly not least, blockchain technology has enabled ‘fractional ownership’ of commercial real estate assets, allowing investors to own a portion of a property rather than paying the full price. This fractional ownership model lowers the entry barrier and enables smaller-scale investors to participate in commercial real estate investments that were previously inaccessible due to the prohibitively high costs of buying outright. Moreover, as Bricksave investors know, this centralised access to information makes it easier for them to evaluate the potential (and assess the risks) of any real estate investment located anywhere in the world before they enter into ‘smart contracts’ that fully automate and enforce terms such as rental income distribution or property management fees.
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As the real estate sector continues to evolve, the integration of technology – and the move away from traditional ownership models and management practices – represents not just a short-term trend but a long-lasting push towards more efficient, transparent, and accessible real estate markets, for owners, occupiers and investors alike.
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