Analyzing the property market and trying to make predictions is not an easy task. You need to look at past themes and try to predict if they will change in the future. With that being said, 2021 has been a difficult year, with COVID-19 and all the imposed restrictions. This has definitely been an extremely unpredictable year.
Global predictions say the economy will remain weak but should start to improve after the rollout of vaccinations. With more people working remotely, the need for office space is heavily reduced. What’s more, there is a trend that eco-friendly buildings are highly in demand.
As mentioned before, the industrial property market is extremely difficult to predict, especially in 2021. But let’s look at some of the facts.
- This was the best performing sector in the last 12 months
- There is less demand for retail spaces
- New industrial developments slowed considerably
- People are calling for eco-friendly buildings
The weakest Performing Market
With the Coronavirus lurking around every corner many companies are allowing their staff to work from home. This means that there is less demand for office rentals. The industrial property market is also under strain, but proving to be the strongest of the three sectors.
There is a significant decrease in the demand for property in every sector. The market has an oversupply which weakens its position even further.
Predictions from the Experts
This has been an unprecedented year, that showed losses in almost every sector. These are some of the predictions made by experts:
- Retail and office prices will decline by between 5% and 10%
- Single-family homes will increase in market value
- Work from home opportunities will continue to rise
- Large companies will shrink their global footprint
- Interest rates are predicted to remain low
- Major cities will see a population decline
- There will be a demand for affordable housing
The Economy will Improve
Even though the property market is at an all-time low, what goes down, must eventually go up again. People will continue to sell their properties because they don’t have a choice. They need the money now, so they are prepared to take a loss.
Supply and demand run in a cycle. So at the moment, residential property is high in demand. This is due partly to the fact that the interest rate is low.
As mentioned before, there is less of a demand for office space. Even those companies that still require office space have different needs than they did previously.
Furthermore, the demand for warehouse space has increased as most people order their goods online, for home delivery.
This has been a tough year for everyone and the market reflects that fact. But with the rollout of vaccinations, things are slowly starting to improve. As more people sell their properties to make ends meet they inject new homes into the property sector. So, the upward spiral is said to continue.