Sustainable development, foreign investments, and AI will become key factors in the future of real estate.

Experts from the UCI mortgage cooperative are analyzing seven trends that will shape the future of the real estate market. The Spanish real estate sector continues to stay afloat despite economic and political uncertainty, as well as the ongoing rise in interest rates. Data from the National Institute of Statistics (INE) showed that over 315,000 sales transactions were completed in the first half of 2023. Housing prices are not in a hurry to decline and continue to exceed the historical highs recorded before the real estate bubble in 2008. Based on this, UCI experts – specialists in sustainable financing – have identified seven key trends that will define the near future of the market.

Seven keys to the future of real estate

In 2024, the real estate market will be largely shaped by the increasing importance of sustainable development, the implementation of artificial intelligence (AI), and the growth of international investments in the residential sector. The uncertainty caused by inflation and rising interest rates, as well as the current political and business situation, will play a significant role for the industry. We are approaching a critical point where opinions clash between those who believe that monetary tightening should be paused and those who insist on further rate hikes.

Environmental, Social, and Governance (ESG)The criteria are becoming increasingly relevant, and their influence will grow in the decision-making process in the real estate market. Investors are starting to place more value on environmental and social factors when developing their business strategies.

Investors are focusing their efforts more on residential rather than commercial real estate, as the residential sector is the foundation of the market. This trend is expected to continue into 2024. International investors are starting to show interest in the Spanish residential market. It is not surprising that the share of purchases made by residents and non-residents is14.9%Of the total number of home buyers in Spain, which is the second-best result in history, only behind the third quarter of 2022, when this figure reached15.9%.

Artificial intelligence continues to gain popularity in the real estate market, with many asset managers and investors using it to predict prices and market behavior. Additionally, a significant number of experts believe that AI will help implement increasingly important technical solutions, which will become a necessity for real estate agencies to adapt to new technologies.

New approaches aimed at addressing housing issues, such as co-living or co-housing, will gain popularity alongside various projects.Build to Rent (BTR)and public-private initiatives for social rental housing in autonomous regions. José Manuel Fernández, Deputy General Director of UCI, noted that all this data indicates that we are "entering a new phase in the housing market," which will be characterized by "changes in demand, as well as a growing interest in sustainable development and ecology."