From the period 2022 to 2028, the Global Real Estate Market is expected to reach USD 4.6 Trillion in terms of revenue, growing at a Compound Annual Growth Rate (CAGR) of 4.60%.
Rapid economic growth in developing countries has raised income levels and benefited the Real Estate industry. Property and condominiums are bought, sold, rented, and leased in the market for commercial and residential use. The commercial Real Estate industry has grown dramatically in the last decade as a result of an increased number of significant companies entering the area regional market. In developing countries, government reforms, lower rents, and lower mortgage rates are expected to boost industry growth in the near future. Factors such as rising demand for residential Real Estate space and increased urbanization as a result of migration in search of better amenities are likely to favor market growth.
Key Highlights from the Report
- The market is divided into four categories based on property: residential, commercial, industrial, land, and others. Residential property will dominate the market in 2021. Millennials, who have become more interested in homeownership in recent years, are primarily driving the growth. The homeownership rate among millennials, for example, has increased, according to Apartment List's Homeownership report. Commercial property is expected to grow at a Compound Annual Growth Rate (CAGR) from 2021 to 2028. The market is booming at an unprecedented rate as a result of the expansion of the tourism sector. In addition, an increase in the number of hotels and resorts is expected to boost demand for bathroom furniture.
- The market is divided into three types: sales, rentals, and leases. In terms of revenue, the rental type dominated the market in 2021. This is because rising home prices in developed countries have resulted in an increase in the number of renters, which favors segment growth. Sales type is expected to grow at a Compound Annual Growth Rate (CAGR) over the forecast period. Consumer perceptions of property ownership have shifted as a result of the COVID-19 pandemic, resulting in increased demand for luxury homes, villas, and second homes.
- Asia Pacific is the fastest regional segment in terms of growth. The Asia Pacific will be the market leader. China held the largest share of the Asia Pacific market and is a hotspot for Real Estate development and investment, owing to its large population. Furthermore, various favorable regulations enacted by the governments of various Asia Pacific countries, including India, are likely to favor growth. The region’s dominance in the market is being pushed by millennials' preference for homeownership. After the millennials, Gen Z is the next generation of renters, and they are expected to spend more on rental services than any other generation in their lifetime. Furthermore, the growing number of visitors from developing countries such as India, the Philippines, and China is expected to support the growth.
Some of the key players in the Real Estate Market include Brookfield Asset Management Inc., ATC IP LLC., Prologis, Inc., Simon Property Group, L.P., Coldwell Banker, RE/MAX, LLC., Keller Williams Realty, Inc., CBRE Group, Inc., Sotheby’s International Realty Affiliates LLC., Colliers and others.
Urbanization is propelling the residential Real Estate Market
Cities now house approximately 55% of the world's 4.2 billion inhabitants. The majority of this urbanization is taking place in cities in the developing world. With cities accounting for more than 80% of global GDP, urbanization can contribute to long-term growth if properly managed by increasing productivity and allowing for the emergence of new ideas and innovations. The rate and scale of urbanization, on the other hand, accelerate the demand for affordable housing. In recent years, significantly more land has been released for low-density development in major city growth corridors. As a result, we've seen an increase in first-time home buyers. Apartments are transitioning to a shared urban lifestyle. Since the growth of Tier 2 and Tier 3 cities, there has been a significant increase in housing demand.
Increase in Residential Property as a Result of Lower Mortgage Rates
The Credit Mortgage rates have an impact on the residential Real Estate Market by increasing the cost of financing a home purchase. According to industry experts, the current residential boom is the result of a confluence of low-interest rates, brisk demand, and supply bottlenecks. In short, it's a situation that many people are acutely aware of, with no single policy to blame and no simple solution. During the pandemic, the housing market strengthened as many people switched to working from home, putting additional living space in high demand. Consistent job growth, an all-time high stock market, rising rents, and expectations of higher mortgage rates have all fueled homebuyers. The extraordinarily low mortgage rates that have aided in the intensification of housing market demand are expected to rise further in 2021.
North America was the Real Estate Market's second-largest region. Because Generation Z accounts for nearly one-quarter of the U.S. population, the Real Estate rental services market is expected to grow. Furthermore, rising demand for agricultural land is expected to create lucrative opportunities for the land Real Estate Market to expand. Furthermore, an increase in government investment in infrastructure development to aid Real Estate is expected to provide lucrative opportunities for market growth in the future. The government is launching a slew of infrastructure-development initiatives. One of the primary drivers is economic growth.