New York, Sept. 15, 2023 (GLOBE NEWSWIRE) -- According to Market.us, the real estate market size is projected to surpass around USD 8.52 trillion by 2032, and it is poised to reach a registered CAGR of 5.3% from 2023 to 2032.
Real estate, comprising properties, land, and infrastructure like roads, utilities, and bridges, is a substantial asset class and a durable investment. Its contributions extend to job creation, wealth generation, and economic development. Experts such as real estate agents, appraisers, developers, property managers, builders, and brokers operate within this sector. Economic expansion, demographic shifts, governmental regulations, and interest rates shape real estate market dynamics. Market demand can vary, and zoning laws, construction standards, and land accessibility can influence supply.
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Key Takeaway:
- Based on property, in 2022, the residential segment dominated the real estate market due to higher demand for residential properties.
- By type, in 2022, the rental segment held the largest market share in the type segment.
- Based on mode, in 2022, the offline segment holds a significant share in the mode segment in the real estate market.
- In 2022, North America led the market with the highest revenue share of 51.9%.
- Asia-Pacific is expected to have the highest CAGR among all regions, owing to the presence of big countries like China, India, and Japan.
Factors affecting the growth of the Real Estate industry?
There are several factors that can have an impact on the growth of the real estate industry, including:
- Interest Rates: Interest rates can impact the demand for real estate; low-interest rates make it more affordable to borrow money, increasing demand for real estate. On the other hand, high-interest rates can make it more difficult for people to obtain financing.
- Advancement in technology: Advancements, such as virtual tours and online property listings, make connecting and transactions easier for buyers and sellers.
- Economic Growth: People have more money to invest in real estate when the economy increases. This can lead to increased demand for residential and commercial properties.
- Demographics: Changes in demographics like migration patterns, population growth, and household formation can also impact the demand for senior housing, whereas immigration can lead to increased demand for rental properties.
- Infrastructure Development: The development of infrastructure like highways and airports also makes an area more attractive for investors and increases the demand for real estate.
Top Trends in the Real Estate Market
The increasing use of technology includes virtual reality tours, smart home features, and online property listings. The increasing demand for sustainable and energy-efficient buildings can reduce operating costs and appeal to environmentally conscious buyers. Additionally, there is rising interest in urbanization as more people seek the convenience and amenities of city living, which has led to the development of mixed-use properties that combine residential, commercial, and retail spaces in a single building. Furthermore, the pandemic has accelerated trends like remote work, which has led to increased demand for homes with dedicated office space or outdoor areas. These trends will likely continue shaping the real estate market in the coming years as buyers and sellers adapt to changing preferences and technologies.
Market Growth
The global real estate market has witnessed significant growth in recent years, and this growth has been driven by various factors, including strong economic growth, increasing urbanization, and low-interest rates. There has been increasing demand for commercial real estate, specifically in the retail & hospitality sectors. In the residential real estate market, there has been increasing demand for properties in urban areas, specifically in cities that offer a good quality of life, amenities like restaurants, and good transport links. At the same time, there has been an increasing interest in sustainable & and energy-efficient buildings, which can help to reduce operating costs. Overall, the global real estate market is expected to continue growing in the coming years and is driven by factors like urbanization, strong economic growth, and an increase in population.
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Regional Analysis
North America is the most dominant market in the global Real Estate market, with a share of 51.9% during the forecasted period. North America has been a significant contributor to the global real estate market, with the U.S. being the largest market in the region. Factors like urbanization, low-interest rates, government incentives, and population growth drive the real estate market growth. Additionally, the U.S. real estate market has attracted significant investment from international buyers, further fuelling its growth.
Competitive Landscape
A small number of established players as the new entrants characterize the market. The real estate market is a growing trend that many big players are focusing on, and to maintain their market share, players in the market diversify the services they offer.
Listed below are some of the most important real estate industry players.
Key Market Players:
- 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 International
- Other Key Players
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Scope of the Report
| Report Attributes | Details |
| Market Value (2022) | USD 5.15 Trillion |
| Forecast Revenue 2032 | USD 8.52 Trillion |
| CAGR (2023 to 2032) | 5.3% |
| North America Revenue Share | 51.9% |
| Base Year | 2022 |
| Historic Period | 2016 to 2022 |
| Forecast Year | 2023 to 2032 |
Market Drivers
Various key drivers influence the real estate market. Interest rates are a significant factor impacting borrowing costs and property demand. Low rates make it easier to secure financing, driving up demand and prices, while high rates can reduce demand. Demographic trends, like population growth and changing household sizes, also shape housing demand. Government policies, including tax incentives and regulations, play a role in property investment. Technological advancements, such as online property platforms and smart home tech, enhance transparency and property design, further defining the real estate market's dynamics.
Market Restraints
Economic conditions, government policies, tax regulations, and social factors collectively influence the real estate market. Economic uncertainties and recessions can reduce property investment and development demand. Government regulations, including building codes and zoning laws, shape property availability and development types. Tax policies, such as property and capital gains taxes, affect investment profitability. Lastly, changing demographics and cultural shifts impact property demand, influencing new development designs and locations, making these factors important considerations in the real estate industry.
Market Opportunities
The real estate sector offers many investment opportunities, catering to developers, investors, and industry participants. Property investment, a common avenue, involves purchasing properties to generate income through rent or capital appreciation. Real estate development, another option, adds value through construction or renovation. Property management is crucial for long-term success, while real estate financing & lending enable investors to fund projects for returns. The burgeoning real estate technology sector provides innovative solutions, opening new avenues for investors and developers. The real estate market's diversity makes it an appealing industry for investment and career prospects.
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Report Segmentation of the Real Estate Market
Property Insight
The real estate market comprises sales, rental, and lease types, with rentals holding the dominant position with a 53.2% market share and a CAGR of 5.6%. This is especially evident in areas with high demand for rental properties, such as college towns and urban centers. Rental properties provide investors with a reliable income stream through rent collection. The COVID-19 pandemic has increased demand for rental properties due to concerns and uncertainties.
Type Insight
The sales segment dominated the real estate market in 2022, and it is expected to grow at a CAGR of 6.5% and a market value of 32.8%. This growth is driven by population growth, urbanization, increased demand for residential properties, remote work, and the pandemic-induced desire for more space, leading to a higher demand for larger homes with additional features like home offices or outdoor spaces.
Mode Insight
The offline mode holds a dominant market share of 68.7% and is projected to grow at a 6.2% CAGR in the forecasted period. This traditional mode of property transaction is favored by many due to the substantial nature of real estate investments. Buyers often seek the assistance of agents or brokers to navigate the intricate process, benefitting from personalized face-to-face interactions. Additionally, the transaction involves significant legal and financial complexities, often requiring the involvement of attorneys. Offline mode facilitates comprehensive support for buyers and sellers, ensuring a smoother and more secure property transaction process.
Market Segmentation
By Property
- Residential
- Commercial
- Industrial
- Land
- Other Properties
By Type
- Sales
- Rental
- Lease
By Mode
- Online
- Offline
By Geography
- North America
-
- The US
- Canada
- Mexico
- Western Europe
-
- Germany
- France
- The UK
- Spain
- Italy
- Portugal
- Ireland
- Austria
- Switzerland
- Benelux
- Nordic
- Rest of Western Europe
- Eastern Europe
-
- Russia
- Poland
- The Czech Republic
- Greece
- Rest of Eastern Europe
- APAC
- China
- Japan
- South Korea
- India
- Australia & New Zealand
- Indonesia
- Malaysia
- Philippines
- Singapore
- Thailand
- Vietnam
- Rest of APAC
- Latin America
-
- Brazil
- Colombia
- Chile
- Argentina
- Costa Rica
- Rest of Latin America
- Middle East & Africa
-
- Algeria
- Egypt
- Israel
- Kuwait
- Nigeria
- Saudi Arabia
- South Africa
- Turkey
- United Arab Emirates
- Rest of MEA
Recent Developments of the Real Estate Market
- In September 2021, Coldwell Banker launched an initiative called "Franchise and Capitalize" to support Egypt's real estate industry. Similarly, Simon Property Group unveiled its "more choices" brand campaign in Simon Mall, emphasizing its diverse range of products and services.
- The COVID-19 pandemic in 2020 significantly impacted the real estate market. Demand for commercial properties like offices and retail spaces declined as businesses shifted to remote work and online sales. Conversely, there was a surge in demand for suburban homes as people sought more spacious and private living environments.
- 2019, the real estate technology sector gained momentum, with companies providing online property management, real-time market data, and virtual property tours. Additionally, WeWork, a co-working space provider, attempted an initial public offering (IPO) but ultimately withdrew due to its valuation and corporate governance concerns.
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