Real Estate Strategist, Paul Guest from UBS shared his insights on the structural changes set to impact real estate telling that we’re at a turning point, citing the major trends of demographics, technology and environmental concerns as catalysts for changes in real estate. Slower growth will affect demand but partly because of political and economic uncertainty. At a contrast, the rate of technological change is accelerating rapidly with Paul referring to Tokenisation as one example set to change the way capital flows into real estate.
One particular food for thought presented by Paul was that turning points by nature are unknowable, referencing Donald Rumsfeld (known knowns, known unknowns, unknown knowns and unknown unknowns) in that an unknown event that hasn’t been priced into the real estate market - will likely trigger the next downturn, but by definition we don’t know what it is and we aren’t expecting it. Until then, we can expect lower for longer interest rates for the foreseeable future which will have a positive impact on our landscape but we should be realistic about yields. On a general level, Paul advised the audience that there is risk in standing still and that we should be prepared as much as possible for the future.
Audience poll results:
What is the single trend which will have the BIGGEST impact on real estate in the future?
Demographic change and slower growth - 26%
Technological evolution - 35%
Environmental concerns - 33%
Capital markets - 4%
Geopolitics - 2%
Other - 0%