2023 Real Estate Trends

Due to technological advancements and ESG goals, the real estate market is constantly changing and facing significant global challenges such as rising construction costs and high inflation.

In this blog, we will list three trends that are currently and will continue to impact the real estate industry in the near future!

Three Trends in Real Estate

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1. Digitalization

Digitalization is a key trend in the real estate industry that affects many different areas. The increasing use of digital solutions in the market enables better availability of services, making properties and homes service platforms. In rental housing, the focus is increasingly on various services in addition to the home itself. Digital property management systems also make it easier for property managers to monitor maintenance, rental, billing, and other administrative tasks.

People are also investing more in integrating smart technologies into their homes. Smart technologies refer to technologies that improve, for example, the human-centricity and environmental-friendliness of living. The growth in demand has made property owners and developers interested in investing in smart construction and systems. Increasingly common smart technologies include digital security and door phone systems. Digitalization continues to evolve, and more innovative solutions for the real estate industry are expected in the future, both in Finland and worldwide.

2. Sustainable development: environmentally friendly buildings and properties

Building sustainable and energy-efficient buildings, and interest in reducing the carbon footprint of housing, are significant and growing trends in the real estate industry. The Finnish government and the European Union have increased incentives and regulations related to the climate-friendliness of buildings and housing, supporting the achievement of climate goals.The carbon dioxide emissions of properties are important for several reasons. Firstly, the real estate industry is one of the most significant sectors that impacts the environment and consumes natural resources

Buildings account for almost 40% of all energy consumed in Finland and are responsible for over 30% of emissions (Rakennusteollisuus RT ry). The real estate sector is responsible for significant carbon dioxide emissions mainly due to heating and cooling of buildings, as well as the use of electricity and various devices. Building sustainable buildings is worthwhile, as they can save energy and water, which reduces costs. The market value and competitiveness of buildings can also increase, as consumers and tenants are becoming increasingly environmentally aware and demanding sustainable solutions.

Given that housing accounts for a large part of the carbon footprint of Finns, it is understandable that residents have become more aware of climate issues and homebuyers want an ecologically sustainable and energy-efficient home. Reducing the carbon dioxide emissions of properties has a huge impact on the environment, and as more people become aware of the problem, the real estate industry continues to take steps towards sustainable development. Landlords can choose more energy-efficient appliances for homes and optimize the temperature of apartments. Residents can also have an impact themselves, for example, by monitoring their own energy and water consumption and recycling carefully.

3. Rise in popularity of renting a home

According to a study by Nordea, the number of people living in urban centers is increasing and urbanization continues, which increases the demand for housing in these centers. Renting a home is also now relatively cheaper due to higher interest rates, and many may delay buying a home due to general uncertainty. This increases the demand for renting. (Nordea Corporate, Finland housing market review reaching a trough)

As the demand for renting increases, communal living has become more common. It has been a trend among young people for a long time, but it has also become more common among other age groups. Communal living refers to a form of housing where an apartment is voluntarily shared among people who are not related to each other or in a romantic relationship. (Urbaria Summaries Series 2020/5)

According to the Urbaria Summaries Series 2020/5 study, communal living is particularly encouraged by the economic benefit and the social aspect of living with other people, which might otherwise be lacking. It also enables higher quality living at a lower cost, especially if one prefers a home in an expensive residential area. The increase in communal living can be a continuation of the trend where renting is becoming more common as ownership decreases and living costs rise in large cities

These are just a few important trends in the real estate industry at the moment, and it can be expected that new trends will emerge in the future!

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