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In 2019, the largest challenge in the real estate sector were permits. Two years later, the sector is fully changed following the overwhelming lifestyle changes caused by the pandemic. Demand for residential real estate has shifted significantly, generating long-term changes that developers must embrace to thrive.
The work decentralization was the main driver of change. It caused changes in mobility, demand and availability of resources to invest. Work from home modalities and online schools created a new lifestyle, increasing the value of space within a home, “within which notable priorities are outside spaces, such as balconies or terraces, as well as flexible areas to study, work or exercise,” said Federico Cerdas, CEO & Co-Founder. Global Businesses Inc & Skyhaus.
About 34 percent of tenants claimed they will change their residence at the end of the quarantine, found a study by Real Estate Market. However, realtors foresee that 73 percent of individuals will be willing to move looking mainly for larger spaces.
Spaciousness, privacy for meetings and classes and well-defined areas within the home for different simultaneous activities are key to this new market, said Cerdas. “Big and better located spaces are very important. People like to live in urban areas where they have supermarkets, public transportation or parks nearby.”
“Amenities within apartment complexes or residences are also decisive factor,” said Tony Hánna, CEO, Tiburon Inmobiliario. But there is uncertainty in the market as nobody knows if the current lifestyle changes are to stay. “The only thing is certain is that home office is here to stay,” he said.International trends are leading developers to build apartments with modular rooms, said Hánna, comprised of flexible spaces that can be easily adapted through panels.
However, the real estate industry might be slow to change, in comparison to other sectors, said Rodrigo Rivero-Borrell, Founder & CEO, Reurbano. “Development in this industry is slow, it is not going to immediately arose from what is trending, so while the market research is ready, we must listen to the immediate user for ideas.”
New consumer preferences are also changing the commercial real estate market. “Offices need to be more than desk spaces and simulate walking areas and parks with open spaces that promote interaction,” said Rivero-Borrell.
While the trends are coming slowly, even small changes generate costs and shift finances and market priorities. As hybrid work modalities are likely here to stay, said Cerdas, developers have to provide spaces that allow the coexistence of working couples, children studying and many others. “We have to now provide options for fast internet, doors and windows with acoustics and large spaces to offer added value to our spaces,” Cerdas said.
Large cities are usually the hubs for residential real estate sales and rentals, so they are the first to feel market changes but represent significant opportunities for developers. “Mexico City is a major hub for employment and commercial activity. Like other large metropolises with high costs of housing, those in Mexico City are forced to live in its outskirts and spend several hours commuting to work on public transportation or in traffic,” said Ricardo Amack, Senior Director of Investments and Development, Greystar. This is the primary reason why multifamily complexes are an ideal option for citizens who want high-quality, secure and well-located housing, as well as a way to bring vibrancy and diversity to existing neighborhoods, he added.
Another critical change is the use of big data and data analytics. “Millennials are now the ones who buy real estate and Gen Z is already entering the market,” said Hánna. Every day, online real estate sales increase, just as in every other market. “I see a future where operations are mostly online. I already had a sales case there the operator did not know the client; the client did not know the property and even took mortgage credit all online,” said Hánna. The e-commerce boom will generate more data that will help focus marketing, development and construction efforts.
While there are large amounts of data available to developers, the country lacks a robust database that contains all this information in a single place. Information regarding the use of parking meters per hour, the location and busy hours of public transportation and location of schools, is public. But it is not stored in one united system that supports real estate sales and leasing, said Rivero-Borrell.
While companies wait for a robust database, social media can be an optimal alternative to generate own leads and trends, said Gustavo Marcos, Partner, Grupo DAGS. “Social media has been a truly innovative tool for the construction industry because it requires a lot of planning and is quite challenging to maintain. Nevertheless, every single company in the industry should have its own social media platform,” he said.
A social media strategy has allowed DAGS it to ally with other construction companies, said Marcos, because it has opened the doors to connect with the right companies and identify market trends.