MAY 2023

REAL
ESTATE
DEVELOPMENT &
UPCOMING TRENDS

RIDDHI PIRGOWIAL,08
 REAL ESTATE
DEVELOPMENT
INTRODUCTION TO REAL ESTATE DEVELOPMENT

Who Is a Developer?
A developer can be an individual or a limited liable company. They engage in business of
developing real estate for sale by erecting buildings and other structures along with the sub-
division of lands into plots. A developer can also be just a project owner or an owner and a
contractor of a project.
Real estate developers have a higher tolerance to risk, perceptive sense of the
marketplace, and the tenacity to see the real estate development process through to
completion, or know when to walk away. Real estate developers must be able to manage
dynamic environments and diverse groups of people and interests.

Real Estate Development Industry

Real estate development is an industry unto itself. By identifying needs that are not being
served by existing real estate product, real estate development is an inherently
entrepreneurial business. The
skills and attributes necessary to identify an opportunity,
manage the process, and
ensure a viable end result are not possessed by everyone.

Real Estate Development Projects

The physical result or product of the development process can also be referred to as a real
estate development. A project under construction or recently completed building project such
as a housing tract or office park are examples of real estate developments.

Real Estate Development Process

The real estate development process is a complex series of steps.
Typically, it starts with a concept and ends with a fully developed property ready to be
purchased or leased. A real estate developer has the skills and education to identify
opportunities and the connections necessary to get a project completed.
But before anything can happen, the developer needs to conduct thorough research and
create a budget to ensure the project is feasible financially.

If the project and budget are achievable, a developer meets with local government
officials for a consultation.
Next, preliminary designs are created, and all applications are submitted. In some cases,
public hearings are held.
If the project is approved, the next step involves finalizing financing and contracts. Once
these steps are completed, construction can begin.
When the building is complete, the developer obtains the necessary building and
occupancy permits and can then sell or lease the space.
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Construction is complete once permits are closed out and the municipality issues
a Certificate of Occupancy. This typically happens once the development has
completed all lifesafety features such as fire sprinklers, working elevators, etc.,
and the building is determined to be safe for human occupancy.
Carefully manage the need to secure early leases with tenant expectations of
completion dates. Consider hiring a property management company to take the
lead here.
Continue to encourage partnership and interaction with neighborhood
stakeholders to position the project as a point of pride and a long-term
community asset

REAL ESTATE DEVELOPMENT PROCESS

REAL ESTATE
DEVELOPMENT
ASPECTS OF REAL ESTATE DEVELOPMENT PROCESS

ASPECTS OF REAL ESTATE DEVELOPMENT PROCESS

 REAL ESTATE'S
UPCOMING
TRENDS

This report will examine the top seven trends set to impact the
real estate industry in 2023 and beyond.

One of the key underlying drivers for these trends is a relocation

from big cities to the suburbs — a development that was
occurring before 2020. But was accelerated by the COVID-19
pandemic.

But there are several other important changes in the real estate
space to keep an eye on over the next 18-24 months.

The latest real estate trends are best described as a mixture of

both positive and negative developments. For starters, the prices
of real estate property continue to skyrocket, which is being
driven by a variety of factors. This, too, has been heavily affected
by the COVID-19 pandemic. Other factors include the ongoing
economic downturn and the emergence of a new buyer
demographic (Forbes, 2019), in the form of Millennials. Hence,
some sectors are not that comfortable with the increase in home
prices, expressing worries that a housing crash may be on the
horizon.
 REAL ESTATE
UPCOMING TRENDS

THE UPCOMING REAL ESTATE TRENDS

IN ASIA,2023

Making Net Zero happen Inflation increases development

risk
Achieving net zero carbon emissions has
In Singapore, an increase in construction
become an essential part of many regional
costs of “easily 15%” was noted during 2022
investment strategies. Compliance with
by one local developer, mainly attributable to
international reporting standards, in
increased material costs. In addition,
particular the European Union’s 2021
manpower shortages due to tighter labour
Sustainable Finance Disclosure Regulation
laws have resulted in construction delays and
(SFDR), is increasingly important. On a
increased costs due to higher salaries.
regional basis, real estate carbon efficiency
standards remain low, with Australia and
Singapore leading the pack by a wide margin.

Increased dominance of private and Overseas investment

sovereign investors
After over a decade of abundant capital, the
rapid reversal in macroeconomic
fundamentals is changing the playbook for
real estate investment. In a rising rate
environment, investors less reliant on debt
will have an edge. With longer horizons and
deep pockets, private and sovereign
investors are prepared to move quickly to
secure prime assets while there is limited
competition.
Overseas investment rose by double-digit
figures in Singapore, which has received
capital that in other years might have been
directed to China, Hong Kong, and Japan.
Southeast Asian emerging markets such as
Indonesia, the Philippines, and Vietnam also
migrated upwards, as investors chase high
rates of economic growth and emerging
consumer classes.
REAL ESTATE
UPCOMING TRENDS
THE UPCOMING REAL ESTATE TRENDS
IN AFRICA,2023
The rich are investing heavily in
Africa’s islands
While the masses are taking slowly but surely
notice that inflation will continue and the
world will not return to pre-Covid conditions
ever again, the rich are preparing in droves
for a world of socio-economic turmoil. They
are heavily investing in Africa’s islands, both
to carve out a safe and peaceful haven for
themselves, to reduce market risk, and to
invest their cash before its value is further
depleted in mainstream bank accounts.
Flexible multi-purpose units that
can be turned into a home, a
business, a hybrid … and back
Create modern, simple buildings with clean
cut designs where the buyer can turn the unit
into a contemporary home, a beautiful café, a
fashionable office … or better even, an
opportunity to create a hybrid of those. Such
flexible multi-purpose units will
accommodate new livelihood dynamics that
are clearly on the rise.
Sustainable eco-friendly mud
houses in Africa’s cities
Modern so-called ‘rammed earth’ houses for
Africa’s cities are already a quiet trend, which
will grow exponentially over the coming
years. Here are some of the benefits: they
are very eco-friendly, up to 30% cheaper to
conventional construction, the material is
mostly locally sourced, and the concept
revives African culture with beautiful walls
that naturally regulate heat.
Safety will become a new buyers’
paradigm
As the world is starting a new socio-
economic era and the cost of living is
increasing drastically across the globe,
analysts predict a lot of social and political
unrest. While in some African city
developments, security for private homes
and offices has always been a priority, other
less crime-stricken cities are following suit.
The need for safety among real estate
buyers is expected to grow rapidly.
REAL ESTATE
UPCOMING TRENDS
THE UPCOMING REAL ESTATE TRENDS
IN EUROPE,2023
Living, working, retiring or passing
through Europe
If there is one extremely important issue that
the COVID-19 pandemic has shined the
spotlight on is mobility or the lack thereof –
no one likes to see their freedom of
movement limited. Besides the ongoing
appeal of the lifestyle and cost of living in
Europe, people are fully understanding that
they can essentially live, work, study or retire
anywhere.
THE UPCOMING REAL ESTATE TRENDS
IN NORTH AMERICA,2023
SUSTAINABLE & ECO-FRIENDLY
HOUSING
Developers in North America are using
energy-efficient designs, eco-friendly
materials, and renewable energy sources to
promote sustainable living.
Inflation increases development
risk
In Singapore, an increase in construction
costs of “easily 15%” was noted during 2022
by one local developer, mainly attributable to
increased material costs. In addition,
manpower shortages due to tighter labour
laws have resulted in construction delays and
increased costs due to higher salaries.
SMART CITIES & TECHNOLOGY
INTERNATION
Cities in North America are leading the way in
smart city projects, integrating digital
infrastructure and technology to improve
urban services and efficiency.
REAL ESTATE
UPCOMING TRENDS
THE UPCOMING REAL ESTATE TRENDS
IN SOUTH AMERICA,2023
URBAN RENEWAL & REVITALIZATION
Urban renewal and redevelopment are key
goals in South American cities, involving
restoring and repurposing outdated
structures, improving infrastructure, and
fostering cultural and economic activities
THE UPCOMING REAL ESTATE TRENDS
IN AUSTRALIA,2023
CO-LIVING AND CO-WORKING
SPACES
After over a decade of abundant capital, the
rapid reversal in macroeconomic
fundamentals is changing the playbook for
real estate investment. In a rising rate
environment, investors less reliant on debt
will have an edge. With longer horizons and
deep pockets, private and sovereign
investors are prepared to move quickly to
secure prime assets while there is limited
competition.
SUSTAINABLE & ECO-FRIENDLY
HOUSING
All across the world, countries everywhere
have incorporated sustainable techniques
and policies to buildings and other
construction projects. South America is no
exception. Multiple different countries in this
continent have incorporated newly
sustainable policies over the last 20 years
that have made influential steps in redefining
the countries’ significant reductions.
Overseas investment
Overseas investment rose by double-digit
figures in Singapore, which has received
capital that in other years might have been
directed to China, Hong Kong, and Japan.
Southeast Asian emerging markets such as
Indonesia, the Philippines, and Vietnam also
migrated upwards, as investors chase high
rates of economic growth and emerging
consumer classes.
 REAL ESTATE
UPCOMING TRENDS
TRENDS GLOBALLY

1. USE OF NEW TECHNOLOGY

The industry is expected to continue

USE OF NEW
TECHNOLOGY
"The real estate sector is no
stranger to technology"
adopting new tech in the coming years.
Technologies that are expected to find
applications in the sector include smart
home tech, online home selling
platforms, and apps.

Artificial intelligence is likewise

expected to play a role in real estate
with building organization, design, and
management being eyed as potential
areas of application.

Indeed, 2022 data show that

consumers are going digital as well. A
significant 44% of new homeowners
look online first for properties for sale.
Also, 12% used the internet to find
information about the process of
purchasing a home. What is also very
salient is that <1% of new homeowners
looked at print materials like magazines
and books to find properties and learn
about the buying process.
 REAL ESTATE
UPCOMING TRENDS
TRENDS GLOBALLY

2. SINGLE-FAMILY HOUSING
DEMAND CREATES
SHORTAGES
SINGLE-
FAMILY The demand for single-family homes is
HOUSING being driven by several factors,
including:
DEMAND Low interest rates
The growing importance of the
"Searches for single-family
home due to the quarantine, social
homes were at their highest
rate in four years in 2022" distancing, and telework
Strong housing trends pre-
pandemic

The pandemic-related demand for

houses is compounded by another
coinciding trend: Millennials entering
the home ownership phase of their
lives.

Housing construction of both single-

family and multifamily homes is on the
rise and reached the highest level
since 2006 in 2022.
 REAL ESTATE
UPCOMING TRENDS
TRENDS GLOBALLY

3. MORE LISTINGS FOR

LUXURY HOMES
Conventionally, the availability of
MORE more luxury homes is seen to result
LISTINGS FOR from the incentives that sellers get
LUXURY from high home prices.
HOMES In the three months ending on
November 30, 2020, luxury homes
The real estate inventory of
high-end homes is saw a 60.7% increase globally. And
expected to continue to new listings grew 31.5% during the
grow same period. The median sales price
of these homes is $899,000, a product
of a 9% change from the previous
year. Luxury houses have a median of
55 days on market. In this category,
however, it dipped -27 days .

High-end residential real estate may

see another bump up in prices. But
this may soon settle to lower price
points. As always, the law of supply
and demand rules the market, with
luxury home prices being driven by
high inventory levels.
 REAL ESTATE
UPCOMING TRENDS
TRENDS GLOBALLY

4. PEOPLE MOVE FROM CITIES

TO THE SUBURBS
The COVID-19 pandemic has fueled
PEOPLE MOVE migration from major cities to the
FROM CITIES suburbs.
TO THE The biggest metro areas, like New
York, San Francisco, and Washington,
SUBURBS DC, are likely to rebound once the US
is firmly on the other side of the
The COVID-19 pandemic
has fueled migration from pandemic.
major cities to the suburbs But the trend of opting out of big city
living may persist for the next 3-5
years.

The two underlying reasons for the

shift are necessity and choice. Those
who cannot afford to stay are moving
out of necessity. While the wealthy are
relocating by choice. Those who have
lost their jobs and can’t afford big city
prices anymore are moving in search
of more affordable housing options.
Last but not least, the suburbs are an
attractive destination due to lower
taxes and cheaper housing and rent
prices
 REAL ESTATE
UPCOMING TRENDS
TRENDS GLOBALLY

5. MORTGAGE RATES DROP

The real estate market is complex.

Prices are driven by a wide variety of
MORTGAGE factors that are local, regional,
RATES DROP national, and global. While basic
concepts like supply and demand
Inflation is one of the major come into play, other things like
trend driving the real estate mortgage rates, inflation, and even
industry
economic conditions in other countries
can also influence the real estate
market.

The RBI last changed the policy rate

on May 22, 2020. Following the last
rate cut by the RBI, all major banks in
India have reduced their home loan
rates to sub-7% level. However,
interest rates on home loans may
already have hit a bottom, currently
hovering at a 15-year-low and the
possibility of financial institutions
reducing rates further are slim,
considering green shoots of growth
are already visible in Asia’s third-
largest economy, amid a spike in
consumption.
CONCLUSION

As more people move to the suburbs and look to

purchase a home, single-family housing prices
are expected to stay high and supply low.
Low mortgage rates will continue to drive the
demand for homes.
In the meantime, the rental property market in
large cities will remain in decline, which will
provide opportunities for real estate investors
planning for a post-pandemic recovery of city
life.
Signs of their reversal include a rise in
mortgage rates and an increase in housing
supply as construction catches up with
demand.
So it will be fascinating to see which of these
trends were temporary due to COVID-19. Or are
legitimate, long-term trends that are likely to
persist over time.