The great science fiction author Douglas Adams once wrote, "Trying to predict the future is a mug's game. But increasingly, it's a game we all have to play."
When you work in real estate, you need to be looking ahead to every upcoming trend, development, innovation, and disruption. When a potential investor comes to Regalway Homes to ask us about what's to be expected in the industry in the next year, we need to be ready with detailed answers.
With that in mind, here are some of our thoughts about upcoming real estate trends in 2020:
The Impact of COVID-19
We don't think it's a surprise to anyone that the elephant in the room right now when it comes to real estate investments is COVID-19. Not only has the coronavirus badly damaged the world's economy, but it has also created a tremendous amount of uncertainty in the stock market, with both records drops and rises in the last month.
The good news is that, unlike the U.S. crash in 2008, the fundamentals of the Canadian housing market remain excellent. In fact, real estate was heading towards a record year in February until we experienced the full impact of the virus on the economy. These factors mean that real estate investments still look to be a solid place to park your money right now.
Real estate is considered to be an essential service, as is the construction industry, meaning that offices remain "open" throughout the country. Yes, there have been shifts to virtual tours and open houses, rather than in-person meetings, but that's to be expected.
Plus, Canada has been putting a tremendous amount of fiscal stimulus into the economy to help businesses and individuals. This influx of funds means that the vast majority of tenants will be able to pay their rent, even if they have been temporarily laid off work.
There is no sugar coating that COVID-19 will result in a slowdown of the real estate industry, just like every other industry in the world. However, all of the above factors could mean that real estate may be heading towards a sharp rebound in the latter stages of 2020 as we further get control of the virus.
A Permanent Shift to Online
As a result of COVID-19, there has been a massive shift towards online as physical offices have been closed. Technologies that were used sparingly by agents and investors, such as video conferencing, have quickly become the standard method of interacting with clients. While virtual tours of homes previously supplemented in-person showings and open houses, they are now the only option for those who are looking to purchase or rent properties.
As a real estate investor, you need to be aware of these shifts. Moreover, you must understand that they aren't just temporary. Yes, physical offices will hopefully reopen soon, but this entire experience has shown the true value of digital technology for the real estate industry. Many of the online practices pioneered over the last two months will continue into the year and become deeply ingrained in the real estate industry. Which ones are currently a mystery, but we suspect that Zoom isn't going anywhere anytime soon!
Continued Demand for Rentals
Though the rental market has been shaken up by COVID-19, the impact does not look to be as significant as was initially expected.
In the near future, a rent decline is likely as consumer confidence drops. However, we can also expect that more people will be renting over the next few years as fewer people purchase homes. Short-term rentals, like AirBnBs will be dropping off while long-term rentals will become hotter than ever. This shift means that investing in rental property could be a smart bet for investors looking for stability and a rental income.
More Sustainability
A trend that has been on the upswing for the last two decades that shows no signs of stopping are sustainable building practices. Going green isn't a fad anymore; it's the default.
In 2020, you can expect there to be an increased emphasis on energy-efficient homes and properties. This will not only bring investors a higher ROI in the long run, but it will also attract more desirable tenants and bring in higher rent. Yes, it can be a bit more expensive to build sustainably, but the pros far outweigh the cons.
So, predicting the future might be challenging (especially right now), but we feel secure in the knowledge that the real estate industry is still an excellent place for those looking to invest their money. If you'd like to talk about all of these factors and other upcoming trends in 2020, we invite you to contact us at Regalway Homes today!