After some whirlwind events in 2016, from the negative views on millennials to Donald Trump’s surprising victory in the US elections, there are of course effects of these events for the upcoming New Year. These effects have created a new wave of real estate trends that are coming ashore. Here are five big real estate trends to look out for in 2017.
Drones are in
After the Federal Aviation Administration (FAA) allowed businesses to operate drones, real estate agents are now devising ways on how to use such technology to promote their properties on sale. A set of guidelines was released and called Part 107 which was designed to “minimize risks to other aircraft and people and property on the ground,” according to FAA’s website. As long as the drones pass and follow these requirements, like weighing less than 55 pounds and the pilot passes the unmanned aircraft operator test, then the go signal is given. At first, drones can be used to take aerial or bird’s eye view images of the neighbourhood, now, drones can be used to perform live and recorded tours of homes for sale.
This can be perfect for real estate agents to properly provide images and videos to interested home buyers, making a strong relationship and trust. Moreover, home buyers who cannot travel to the in-house tour can watch videos recorded by the drone or just watch a live tour to see more. With the use of drones, the home buyers can see clearly if there are damages or cracks in the chimney, roof or any room they want to see.
Existing neighbourhoods with different housing arrangements are now being transformed by adding urban amenities, thus having a place where people can work, play, and live their lives in one. This neighbourhood in 2017 will be called surban, folks. This kind of neighbourhood is inclusive, making it affordable to teachers, firefighters, police and janitors, Bill Endsley, of the International Real Estate Federation, a Washington, D.C.–based international real-estate consulting group said via MarketWatch.
“The more we go down the road of exclusive development, the more problems we have,” including traffic congestion, air pollution, and sprawl, Endsley said.
Millennials can buy their own house
According to the 2016 National Association of Realtors’ Home Buyer and Seller Generation Trends study, an increasing number of home buyers are actually millennials, and more of them are able to purchase single-family homes outside urban areas. Jessica Lautz, NAR’s managing director of research, said that many of these millennials have saved enough money to buy a property more than a condo unit or a starter home.
NAR Chief Economist Lawrence Yun said that millennials may choose to live in an urban area as renters, but survey results showed that most are not staying once they already have the money to buy their own.
“The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” Yun said. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out.”
“Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction, and affordability pressures make buying in the city extremely difficult for most young households,” he added.
The surprise win of Donald Trump
According to a report by news.com.au, as uncertainty oozes from the President-Elect, many are suggesting that the Australian property may experience a boost in demand from foreign investors who will see Australia as a safe investment.
“For Australia, the fallout from the election result is all about confidence and sentiment. Buying, selling, investing and consuming are all driven by confidence. The more confident you are with the security of your own income and the destination into which you want to invest, the more you are likely to do so,” LJ Hooker head of research Mathew Tiller said.
“Therefore, the short term may see investors hold off investing anywhere until things are more certain, however, at the end of the day this result makes Australia a more attractive, secure and less risky destination for global capital.”
Meanwhile, Ren Wong, CEO of ASX-listed financial and property services group, N1 Holdings, said that Trump’s presidency will “have an impact on Chinese sentiment.”
“The feedback that we are getting is that they are concerned with what impact a Trump administration will have on Asian investment. Mr. Trump has previously stated he would increase tariffs on goods imported from China to 45 percent. He has stated he would tighten trade agreements. This creates uncertainty for all investors who are looking to invest in the US,” Wong said.
“Australia is seen as a very stable country with stable, government and regulations. It is geographically close to Asia and is seen as part of Pacific Asia, a regional neighbour.”
Include the Generation Z
Even though millennials are earning their buying power, soon enough Generation Z will also reach the market. This generation is already in the age bracket of teenagers and turning 18 this 2017, meaning these teenagers are almost to the age of buying their own homes. According to Better Homes and Gardens Real Estate, 97 percent of Generation Z respondents believe that they will own a home once they grow up, and 82 percent think that owning a home is the most important factor to achieve the American Dream.
“That might sound a little traditional, especially when compared to what we’ve seen with millennials, but this is a generation that values home ownership,” said Sherry Chris, president and CEO of Better Homes and Gardens Real Estate.
One of the respondents, 17-year-old Cayman, said “I want a big house,” said panelist Cayman, 17. “I want a room for each of my kids, a master bedroom, a few guest rooms, a movie room – I want a lot of space.”
The Generation Z will experience the age with low-interest rates, better job prospects, and higher wages to afford the costs of college education, said NAR research director Lautz.
With said all that, business brokers victoria should take advantage of the uses of drones to promote properties for sale, pay more attention to millennials and generation Z when selling properties and be prepared to have a demand in properties from foreign investors during Trump’s presidency. Also, surban living is becoming a trend and should prepare properties that could provide a work-and-play environment for home buyers.