The real estate sector, long considered the backbone of the global economy, is undergoing significant innovation and transformation. Over the next three years, trends in the real estate business are expected to shift, reflecting changes in lifestyles, consumer needs, and the impact of technology and sustainability. Major cities around the world are becoming laboratories for these trends, as developers race to create new solutions for a more modern and sustainable future.
Sustainability as the New Standard
Sustainability has transitioned from being an optional feature to becoming a central focus in property development. According to the United Nations Environment Programme (UNEP), the real estate sector accounts for approximately 40% of global carbon emissions, prompting an urgent push toward adopting green building practices.
In major cities like London, Paris, and New York, new buildings are now required to meet stringent sustainability standards. A prime example is The Edge, an office building in Amsterdam widely regarded as one of the world’s most sustainable structures. It harnesses solar energy as its primary power source and is equipped with advanced technology to optimize energy consumption. This trend is expected to grow as awareness of environmental impact continues to rise.
The global green property market is projected to reach a valuation of USD 2.8 trillion by 2027, driven by strict government regulations in developed countries and increased interest from institutional investors in projects aligned with Environmental, Social, and Governance (ESG) principles.
Technology Shaping the Future of Real Estate
Digital transformation is a key driver of modern real estate. Technologies like the Internet of Things (IoT), Artificial Intelligence (AI), and Big Data are revolutionizing how properties are designed, built, and managed. In Tokyo, for instance, developers such as Mitsubishi Estate are utilizing AI to analyze market data, predict demand, and optimize property designs.
The trend of smart buildings is becoming increasingly dominant in major cities like Dubai and Singapore. These buildings are equipped with automation systems that allow residents to control lighting, temperature, and security through mobile applications. According to a Grand View Research report, the global smart building market is projected to grow at a compound annual growth rate (CAGR) of 12.6% through 2030.
Additionally, the metaverse is beginning to influence the real estate industry. On platforms like Decentraland and The Sandbox, digital properties are being sold for millions of dollars, attracting large corporations to invest in virtual spaces. While still in its infancy, this trend offers developers unique opportunities to explore previously unimaginable business models.
A Shift to Suburban Living
The COVID-19 pandemic brought significant changes to consumer preferences in housing. In major cities such as San Francisco, Sydney, and London, many families have opted to move to suburban areas, seeking larger homes with access to natural surroundings.
In the United States, the National Association of Realtors reported an 18% increase in demand for suburban homes since 2020. A similar trend is observed in major European cities like Berlin and Madrid, where suburban property demand has surged as people prioritize work-life balance.
Developers are responding to this trend by creating residential projects that not only offer modern amenities but also integrate natural elements such as parks, walking trails, and access to lakes or rivers. Projects like Valencia Park in Los Angeles exemplify how suburban housing can meet contemporary lifestyle needs.
Co-Living and Co-Working: Solutions for a New Generation
Millennials and Generation Z have become key players in the global real estate market. Their flexible and dynamic lifestyles have created new demand for co-living and co-working spaces. In cities like Mumbai, Singapore, and Jakarta, these spaces offer affordable housing with shared amenities such as gyms, creative spaces, and cafes.
According to a JLL report, the global co-living market is expected to grow at a CAGR of 17.5% through 2025. Co-working spaces are also experiencing rapid growth, particularly in major Asian cities, where shared workspaces provide cost-effective solutions for small and medium-sized enterprises looking to reduce traditional office rental expenses.
Vacation Properties in Exotic Destinations
Investing in vacation properties is an ongoing trend, particularly in exotic locations like the Maldives, Bali, and the Caribbean. Investors are drawn to the potential income from short-term rentals through platforms like Airbnb.
In Bali, for instance, vacation property sales surged by 40% in 2023, according to a Colliers International report. This trend is fueled not only by local investors but also by international buyers seeking second homes in popular tourist destinations.
Furthermore, unique property projects, such as floating villas in the Maldives or eco-friendly cabins in Scandinavia, are attracting affluent travelers looking for distinctive experiences.
Focus on Secondary Cities
Secondary cities in developed and emerging countries are starting to attract attention from investors as more affordable locations with significant growth potential. In India, for example, cities like Pune and Ahmedabad have shown notable increases in investment in both commercial and residential properties.
A similar trend is evident in Indonesia, where cities like Surabaya and Makassar are becoming magnets for foreign developers. According to Cushman & Wakefield, foreign investment in the property sector in these secondary cities grew by 15% in 2023.
Notes:
Over the next three years, the global real estate business will continue to evolve, driven by technological innovation, sustainability, and shifting consumer lifestyles. Major cities like New York, Tokyo, and Singapore are at the forefront of adopting these new trends, while secondary cities present significant opportunities for those seeking high-growth markets.
For real estate players, understanding these trends is key to staying relevant in an increasingly competitive landscape. Real estate is no longer just about constructing physical structures; it reflects the needs, aspirations, and expectations of a world in constant change. By integrating technology, sustainability, and innovation, the future of real estate is brighter and brimming with opportunities.
