No matter whether you’re a buyer, seller or investor, it is essential to stay informed on key trends that are shaping the real estate market today. In this article we’ll explore six trends that help us to understand the mindset of buyers, what they want in a home and the economic factors that affect buying your dream home or investment property.
1. Real estate in the work from home era
Post-pandemic the work from home dynamic has rapidly accelerated. For many, the traditional workplace environment is something of the past and new homebuyers are reconsidering the need to live close to urban areas and the office environment. As a result, there is a push from consumers towards suburban and rural areas because their list of needs grows to suit their work-life balance, prioritising spaces such as home offices, quieter, more attractive environments and affordability.
Homebuyers are seeking flexibility within their everyday lifestyle. Researchers have found that millennials seek fixer-uppers or new builds in more attractive areas. They care about the design and how it works for them, because creating a multi-functional space is important to the newer generation of homebuyers.
This trend goes hand-in-hand with the emergence of walkable retail destinations, entertainment precincts and smart infrastructure, with the real estate market reflecting this shift of priorities with a need for flexibility, lifestyle based living and long-term financial stability.
2. Home loan rate increases
A critical trend influencing the real estate market globally is the rise of home loan interest rates. This has partially derived from the central banks attempt to control inflation post-pandemic. In Australia, home loans have risen from a historic low of 2.63% in April 2022 to around 6.05% in 2024, resulting in much larger monthly repayments pushing buyers to reconsider their options.
Buyers are now opting to purchase smaller homes or fixer-uppers to help manage their budgets. This can include offsetting these costs by making larger down payments, reducing the loan size and in turn, the overall cost of borrowing.
Others are being forced to adjust their strategy and delay buying homes entirely, hoping that the interest rates will drop within the near future. With the change in consumer behaviour, the housing market is cooling. Price growth is slowing down, there are fewer bidding wars, and more negotiating power for those still searching for homes.
3. Sustainable building practices
Consumers no longer only seek luxurious features in homes; they also want homes that are environmentally friendly. Green homes are now seen as a long term investment that not only saves money but also contributes to a sustainable future. Home features such as solar panels and battery storage, temperature regulating double paned windows and solar hot water systems ensure energy savings.
Globally, communities are now being developed around this trend. Having access to public transport as well as cycling infrastructure, walkable retail destinations and access to recycling stations is important. Parks and recreational areas also appeal to homebuyers seeking better mental health and physical health by connecting with others in nature and through physical activity.
4. Smart homes
Smart home technology has become very popular; what was once a luxury has now become affordable for the average house. With a wide range of products and the integration of AI and wifi-compatible devices, these smart products can learn your daily routines and practices with features such as predictive analysis, remote control and voice and hands-free home control. It has become a trend that buyers consider when buying a home, especially with those who prioritise convenience, so real estate developers and sellers are integrating this technology into homes for better resale value to meet buyer expectations.
In a study conducted by Statista, 32% of the respondents stated that the smart devices they owned were for security and safety. This may include energy saving motion sensor lights, smart locking systems offering keyless access using smartphone or biometrics or even 2-way audio cameras and alarms. Other smart home technology products may include voice controlled lighting and thermostat settings that conveniently provide the buyer with a hassle free managing their home’s environment, allowing for greater comfort, energy efficiency, and personalised control at their fingertips.
5. Investment trends in real estate
Buying an investment property largely depends on the needs and budget of the consumer. However, long term investments remain stable against inflation.
Consumers are witnessing the cost of renting property in more desirable areas increase, even matching the monthly mortgage payments for owning a home in that area. These consumers are leaning more towards home ownership as part of a long term investment strategy, building equity in a healthy long-term asset to further their future financial security.
An additional strategy which has become quite popular is renting out property as an AirBnb to cover living expenses or finance other AirBnb purchases. This is because short term rentals have been proven to be a very lucrative option in popular tourist areas, creating a self-sustaining investment cycle.
Other investments such as mixed-use developments and co-living spaces are sparking interest over the traditional buy-to-hold strategy, as this caters to a shift in the broader society change in how younger generations perceive real estate as an investment. This way of thinking focuses on experiences and lifestyle over long-term financial commitment.
6. Luxury real estate
Contrary to popular belief, luxury real estate has remained strong and has grown in value over the past 5 years by a significant percentage. According to CoreLogic Asia-Pacific, the luxury real estate market is still receiving a greater demand even relative to the pandemic, and was the best performing sector of real estate in 2021.
Luxury real estate manages to capture the hearts of high net-worth buyers who are drawn to houses that are wellness and technology focused. Some of the features include home spas, private gyms, wellness spaces such as saunas, yoga studios and meditation gardens.
Branded residences such as Versace Residences in Surfers Paradise is a good example of the relationship between affluent buyers and luxury hotels or lifestyle brands providing their guests with luxury homes that have all the best prestigious amenities and tailored services at their fingertips. By recognising this, it creates an opportunity to financially gain.
Summing it up
By being aware of the latest trends in real estate you can better analyse the market and identify opportunities that can contribute to your financial success.