Real estate market analysis: Trends and prospects for the future.
The real estate market is a sector in constant evolution, being an area of activity with trends and perspectives that change according to geographic, economic, social and political conditions.
In recent years, the real estate market has experienced significant growth, with demand for houses and apartments increasing in many regions. However, the sector also faces challenges such as inflation and changing consumer preferences.
In this article, we will analyze the trends and prospects of the real estate market, and explore the opportunities and challenges facing the sector. Let’s go?
What challenges does the real estate market face today?
According to a study by real estate consultancy CBRE – “Global Outlook 2030 – The Age of Responsive Real Estate” -, the real estate sector will undergo a turning point in the coming years, with the price per square meter rising, and will experience a sustainable rise until 2030.
However, the real estate market faces several challenges. Namely, inflation, changes in consumer preferences, lack of properties on the market, delays in licensing, high tax burden, unpredictability of construction costs and the potential increase in interest rates.
These are just a few examples of the challenges the real estate industry currently faces. Despite everything, the real estate sector continues to stand out as an investment haven. Portugal remains attractive to investors, maintaining competitive advantages and companies in the sector resilient in the face of challenges.
It is, however, important to monitor these changes and understand how they can affect the market and opportunities in the future.
Here are 5 trends and perspectives for the future of the real estate market!
1) Real property valuation: In the last ten years, the real estate market has witnessed a difference between advertised prices and actual sales values, reaching an unprecedented level. According to analyzes by Confidencial Imobiliário, this difference reached a notable magnitude in the 2nd quarter of this year, reflecting a complex dynamic between sellers’ expectations and buyers’ realities. This trend clearly shows a continuous rise in announced prices, but a stabilization in sales prices, with both lines being further away than ever in the current decade. This is due to the influence of various factors, such as economic fluctuations or changes in demand and supply patterns. In this challenging and constantly evolving scenario, understanding the nuances of the market becomes crucial for both parties involved, aiming to make informed and successful decisions when buying or selling your home.
2) Change in consumer preferences: Although it has already passed (at least we hope so), the pandemic left a “mark” on the residential market. When confinement closed everything and everyone at home, many families realized that they lived in spaces that were poorly prepared for a reality like the one we are experiencing. Which led people to discover new needs. The demand for larger homes, with outdoor spaces, such as terraces, balconies or gardens, whether in houses or apartments, has increased, and the trend seems to be here to stay.
3) Sustainable quality of life: One of the biggest trends in the real estate market is sustainability. In other words, the concern with the use of renewable and clean energy, and the reduction of water and electricity costs. Adapting to this change is vital, as people increasingly seek a sustainable quality of life. Here, the legislative branch can also influence future trends and valuations. Namely, with the possibility that the amount of CO2 produced by a given home will become taxable from 2027 – in accordance with the European Parliament meeting on April 18th. As a result, the market must follow the trend, with sustainable constructions, with architecture focused on natural resources, and more focused on preserving the environment.
4) Change in the concept of luxury: The idea that buying a luxury home is only related to high purchasing power is changing. Today, “the modern concept of luxury represents the possibility of being happy, of having unique experiences that add more quality to our lives”. In this way, the sale of luxury properties can translate into an “Opportunity to fulfill clients’ dreams and desires and provide a privileged and differentiated experience”. – Source: Annual global conference of the real estate network Christie’s International Real Estate.
5) Real estate market will remain strong: The real estate market has proven its resilience over the last few years marked by the Covid-19 pandemic. As we saw previously, the pandemic changed the concept of home and this was reflected in housing sales in Portugal and abroad. According to the “Christie’s International Real Estate Network”, there was an increase in transactions by Portuguese and global real estate agencies, such as Porta da Frente Christie’s. And, as they say, I am sure that “This trend of market growth and development will continue worldwide” – largely due to the strong pressure that continues to be felt in the market due to the search for a home.
And here it is, another article that is a little different from the usual, but that I think will be of special interest to you. Don’t forget, my success is reflected in your satisfaction. See you soon…