What is the current state of the commercial real estate industry? What are the projections of its state in the future ahead? If you are looking to venture into this lucrative industry, prior to searching for the best commercial & business spaces for sale and rent in Singapore. You got to know the answers to the two questions. With them, you would be in a better position of coming up with an effective strategic plan. This article aims to provide an analysis of the industry and to answer the provided questions.
Real Estate Technology
The industry of late has experienced a rapid technological transformation. Technological investment had already been rising, with about $13billion invested in real estate technology in 2017. Covid19 pandemic has prompted the fast creation of new digital resources. Property listing platforms, smartphone apps, and virtual reality are all in to transform real estate transactions.
You should also expect an increase in property listing websites as the pandemic is not likely to go away any sooner. The development of real estate apps for mobile phones with real estate transaction capabilities is also going to change the face of real estate technology. Sellers are being capacitated through free online tools. These give them reviews on recently sold homes and the ones that would be on sale.
Real Estate Agents
Currently, there is an ever-growing disconnect between real estate agents and homeowners. Preference differs; while some prefer selling on their own, others would have agents do the work on their behalf. Though you would pay agent fees, these guys can sell faster because of good negotiating skills.
However, the rise of For Sale by Owner sites (FSBO), which are on the increase, implies more people will opt to sell on their own. Survey data provided by ForSaleByOwner.com reveal that 55% of millennials would instead use for sale by owners for listing their homes for sale. Thus real estate agents feel the pressure; however, it is unthinkable that this would see their extinction.
Real Estate Housing Market
The markets of this industry are projected to change with the coming of new homebuyers such as the millennials. This generation is expected to target the suburban areas in their search. Having more interest in walkable, friendly neighborhoods that are close to various services and facilities. Thus markets are projected to shift from commercial to suburban dominated. In addition to this, a rise in luxury properties is set to take place. With an increase in demand for houses, luxury properties to accommodate home seekers are set to increase.
Retail and Office Rental Rates
With the covid 19 pandemics having forced closure of many premises. More immense repercussions within the commercial real estate industry are projected to come within the future. The business that makes it through this torrid time will reconsider the size of the space they occupy. Since rental rates are charged on space demand, a fall of need would trigger rental rates’ plummeting. The fall of the market can be due to the closure of businesses or reduced space being used.
Those that would be badly hit are the retail and restaurants which rely on sales volume. With a reduction in sales volume, rents are bound to drop. In addition to this, the office sector’s current state has seen most workers working from home in line with covid19 restrictions. This has dramatically reduced office rates. With more prominent organizations now opting for virtual working, the future will see the rents further dropping to attract tenants.
Both the current and the near future of the real estate industry are influenced by technological advances, buyer-agent interaction, and a shift in homeowner behavior. Demographics also have a huge say when it comes to the party. Knowing all of the above, you can go on and look for the best commercial & business spaces for sale and rent in Singapore.