What will the residential market look like in 10 years’ time?

Shifting into secondary markets

“We anticipate over the next several years multifamily properties will remain in high demand, especially those located in markets that are attracting top talent and companies and offer supportive regulatory environments. We are moving money away from markets like Seattle and Los Angeles and redeploying capital into more compelling markets such as Denver, Salt Lake City and areas in Texas that have demonstrated strong in-migration patterns, healthy economies and a high quality of living.

Over the next 10 years, we should continue to see innovation in the types of amenities offered at apartment communities, including increased technology applications and hotel-like amenities that deliver top-level convenience and service to residents. Overall, we are very optimistic about the future of multifamily.”

Larry Jacobson
President and CEO
The Jacobson Company

Versatility and adaptability will prevail

“Sustainable properties constructed from ecological, health-enhancing and partly recycled materials will be the standard in the future. With solar power plants and other renewable energies, these buildings can be climate-positive and produce clean, inexpensive energy for the residents. By means of digitalization, artificial intelligence, robotics and modular prefabrication, the construction industry will experience its overdue Industrialization 2.0. The increase in efficiency offers scope, for example, for energy-saving measures and also lower rents.

Urban buildings and neighborhoods will prevail that are versatile and adaptable with short distances, spaces for meeting and exchange, and fluid transitions between living and working. Buildings, residents and owners will communicate digitally in real time. Properties will use sensors and artificial intelligence to determine, evaluate and make data accessible (including energy consumption, necessary repairs, etc). They will help the residents to optimally use resources in accordance with their user behavior and thus protect the climate and finances.”

Philipp Langbehn
Portfolio manager
KGAL Investment Management

Four key trends

“The development of the residential market by 2032 is going to be characterized by several key trends: urbanization, declining household sizes, sustainability and the blurring lines between work and leisure.

Urbanization bodes well for investors, particularly in metropolitan areas. Whereas total populations may decrease, most cities should buck this trend as they attract young people with international outlooks. More students and young professionals will speed up the decline in household sizes. Investors should take note and develop smaller units and furnished or serviced apartments.

Demand will be strongest in locations that combine attractive offerings for shopping, working and living. Sustainable transport will be key as car ownership declines while distance sensitivity grows. Such mixed-use developments near transportation hubs offer the best value proposition.”

Kurt Jovy
Head of real estate product management
Universal Investment