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Challenges Facing The Real Estate Sector In 2021
The real estate industry plays a significant role in the global economy. On one hand, investors could argue that the sector appears primed to the benefit from market opportunities, however, real estate also faces several challenges going forward. Though the sudden breakout of the pandemic brought unimaginable issues to the fore, the crisis has also paved way for innovation and increased use of technology.
Virtual real estate viewings gained prominence, which helped the industry in more ways than one.
By making it easier and more convenient for homebuyers and investors, the real estate industry made its presence felt. As a result, the profitability of the sector increased and so did the scramble for property. This just proves, once again, how resilient the real estate market can be. Despite the pandemic, the sector stood strong and managed to gather numerous investors and buyers.
However, despite the increase in the number of buyers, there continues to be shortage in properties for sale – a problem that is expected to continue for some time. But what are the other challenges that industry experts anticipate in 2021? Let’s take a look!
The full impact on the real estate market is still unknown, but the pandemic will undoubtedly reshape the commercial sector in several ways. Two primary factors may drive the effect of this pandemic on real estate market demand. Will real estate demand be reduced by virtual offices and home entertainment? Or, will we insist on lower density wherever we go, requiring larger spaces and higher costs to accommodate the same functions?
2. Low-Cost Housing
Most people can’t even afford affordable housing. Many are struggling to get by each day due to their numerous debts. Millennials are relocating to cities in an attempt to find a good-paying job. But since the cost of living in most cities continue to increase, they have no choice but to rent a unit instead of buying their own house. Even if they can get approved for a mortgage, there are a limited number of affordable properties for sale.
3. Competition from Non-Traditional Markets
Traditional real estate agents will continue to face stiff competition from non-traditional sources. These sources include options such as fee-for-service brokers and virtual realtors. While most brick-and-mortar real estate agents will almost certainly have developed an online presence and implemented new technology, it’s still not the same as a company that completely operates online. Realtors that still operate from an actual building will face increased competition from companies conducting business completely online.
4. Demand for Property
The decline in property rate and the need to have a permanent shelter has given people a reason to buy their dream home. The demand for spacious residential and commercial properties is said to grow further in 2021, as market players are delivering beyond obvious under the affordable luxury category at attractive prices. The pandemic seems to have restored people's faith in investing in a property and having a permanent source of income, and it is expected that real estate will see a major spike in ownership in residential and commercial space in the year 2021.
5. Keeping Up with Latest Tech Trends
We can no longer deny the technology has a great influence no matter the industry. In real estate, consumers started looking for houses, are applying for loans, paying their mortgage, and selling their properties online. This had home sellers and real estate agents scrambling to keep up with all the tech innovations consumers are expecting them to have. Now, property viewings are done virtually before buyers decide to check the property in person. Realtors have also begun to take full advantage of virtual open house sessions to showcase properties to a mass audience.
Failure to keep up with real estate trends can put a property at risk of staying longer in the market. Lenders who fail to nail their online marketing will lose potential clients. Even real estate agents are attempting to keep up just to get more buyers on board.
Indeed, there are other issues the real estate industry is likely to face this year, but one thing’s for sure. Virtual real estate viewings are here to stay.
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