5 REAL ESTATE SECTOR TRENDS TO LOOK OUT FOR IN 2024

5 REAL ESTATE SECTOR TRENDS TO LOOK OUT FOR IN 2024

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5 real estate sector trends to look out for in 2024
The dawn of a new year means both existing and prospective investors are on the lookout for investment assets where they can put their money and get good returns.

Real estate presents a good case in an investment opportunity, especially for savvy investors who have what Chudi Ejekam, former director of real estate at Actis, describes as “patient capital ready to endure long investment cycles.”

Real estate is seen generally as a complex investment asset class which demands a good understanding of its intricacies along with evolving trends that help ‘enthusiastic investors‘ to make informed investment decisions.

For this reason, experts have identified five major trends which, according to them, will have a significant influence on the real estate sector all through 2024, insisting that understanding and adapting to them will help investors and sundry home buyers to navigate the sector.

Tech integration redefines property development
If there is any major disruption in the real estate sector today, technology is gaining traction in asset production and transactions. It is increasingly becoming a driving force in the sector.
Most developers are now into smart home development which is driven 100 percent by technology. Olajide Faremi of the Department of Building, University of Lagos noted at a real estate conference recently that technology has become a major tool for mass housing.

It is expected that, in 2024, there will be a surge in smart home technologies, sustainable building practices and the integration of artificial intelligence (AI) in property development. Investors in real estate will need to embrace these innovations to enhance the appeal and efficiency of their properties, meeting the growing demand for sustainable and tech-savvy living spaces.

Besides AI, Blockchain is another tech system that is transforming real estate on the transactions side. In a manner not seen before, it is disrupting traditional real estate transactions by enhancing security, transparency and efficiency.
The rise of co-living and flexible spaces
Chiefly for economic reasons, co-living or flat sharing has become a lifestyle, especially among the millennials in big cities such as Lagos and Abuja. “The way people live and work is undergoing a paradigm shift, and the real estate market is adapting accordingly,” Entrepreneur notes, adding that co-living spaces and flexible working arrangements are gaining popularity, driven by a growing millennial workforce and a desire for collaborative environments.

MKO Balogun, Group CEO, of Global PFI, agrees, disclosing that demand is very high now for small family units as well as large apartments where people co-live and share facilities. According to him, “About 60 percent of people looking for homes in Lagos are looking for small apartments to buy or rent.” In 2024, investors should consider investing in properties that cater to this demand.
Sustainable development or going green
In real estate, environmental sustainability is no longer a buzzword but a fundamental consideration. In 2024, analysts expect a heightened focus on green building practices, energy efficiency and eco-friendly development. Investors and developers who prioritise sustainability not only contribute to environmental conservation but also align themselves with the preferences of an increasingly eco-conscious market. The whole world, they say, is going green and developers are doing the same.

Ruth Obih, CEO, 3Invest Limited, told BusinessDay that sustainability is the new normal, noting that before now, the primary concern of investors had been the level of returns provided by an investment, with doubts on how those returns have been generated.

Rental market evolution
The rental market dynamics are evolving, driven in part by changing demographics and lifestyle preferences. Short-term rentals, co-living arrangements and furnished apartments are gaining popularity. Entrepreneur advises that investors should consider diversifying their portfolios to meet the demand for flexible and unconventional rental options. It cites Novograc HUD’s 2024 Fair Market Rental Report which projects that nearly 99 percent of all areas will see an increase in fair market rents in the full year 2024, with an average increase of ten percent over the prior year.

Modular housing
Modular housing, though not a new development, is yet another trend to watch in the new year. By leveraging prefabricated and modular construction methods, this innovative approach addresses challenges in traditional homebuilding.

It accelerates the construction process while maintaining a commitment to quality. The efficiency gains, cost-effectiveness and environmental sustainability associated with modular housing make it an attractive option for developers and homebuyers alike.

 

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