Megatrends: Let's Take a Look Together

10 May 2022, Lynette McFadden

Megatrends: Let's Take a Look Together

The property market would be defined as one of New Zealand’s most significant economic determinants. It requires constant interpretation and review, including looking ahead – sometimes well ahead.

Although stepping into the future is potentially scary, long-term business sustainability requires just that. Recently I got an appreciation of what that future could potentially look like using the strategic intelligence detailed in a report by The Real Estate Institute of New Zealand titled Megatrends: A Report on New Zealand Property 2022. It’s a significant document, of relevance not just to those in the real estate sector but anyone with an eye on global and local property trends. 

Remembering that a megatrend is a major shift in environmental, social and economic conditions that can substantially change how we live, these are some of the ones that stood out to me: 

• The return of the home office – this came under the megatrend titled ‘Hybrid Working’. 

Due to COVID, home offices have become a vital consideration when purchasing and I only wish I’d incorporated one when we built a new home six years ago. At the time of building, I thought an office was outdated and would never be used, but how wrong I was and how much easier having one would have made life during periods of lockdown and isolation. The reason this pre-empts a potential megatrend is what would happen if everyone wanted to work from home permanently.

• Digitisation – yes, there’s a strong place for digitised processes with automated tasks fitting this space. But the report noted that people remain essential in real estate areas where human connection and creativity are required. Phew! I was pleased to see that, but it’s really about superb connectivity skills and creativity aimed at maximizing a client’s returns whilst maintaining transparency. 

• Rental Reality – I think this one will come as no surprise. Homeownership rates are falling and there is a greater acceptance of renting rather than owning. 

For the landlord, there’s the benefit of a return on his/her investment and for the tenant it can allow them to invest their resources (given they have them) in a more diversified number of assets besides a mortgage. 

There’s also the development of institutional investment. If you want to know more about this practice, I’d encourage you to download the whole report. It details this sector, which in North America is considered a major investable asset class while being embryonic in other parts of the world including NZ.

So why have I told you all of this? It could be because I wanted to get my word count up, it could be because it interests me, which it does, or maybe it’s because it gives us all tips and insights into where our future could be heading – and it’s a great time to start talking about just that.

You can view the The Real Estate Institute of New Zealand (REINZ) report mentioned here.