In the spring, during the first corona wave, there was a great deal of uncertainty about the future. Many sellers were preparing for a repeat of the previous economic crisis and were ready for a discount of up to 10%.
The possibility of such transactions was discussed until the end of the summer. With the end of the payment holidays, a major crash was announced in the autumn, which did not come. To everyone’s surprise, transaction activity in the new development market returned to normal levels and prices continued to rise.
Following these developments, more pessimistic analysts have held back. This in turn has increased buyers’ confidence in the future. Somewhere in Europe the mysterious printing of money is taking place, and no one understands exactly how it is affecting us or how that money is reaching the people.
Yet it continues to arrive. First through the appreciation of more liquid assets, such as stocks, and then less liquid assets, such as real estate. Unlike previous crises, Estonians have a significant amount of free money available in their bank accounts, and the growing fear is that inflation will claim a large chunk of its value. It is the fear of inflation that motivates one to buy real estate, be it new housing or an investment made for the purpose of renting.
The way of life has changed forever
Teleworking took on a new meaning and in this regard the world will never be the same again. If a year ago there were still a lot of people who had been able to postpone learning tips and tricks for participating in web meetings, then there are no such office workers today.
While many office building owners are confident that work will soon resume in the old-fashioned way, this is a miscalculation that may prove to be costly. Companies continue to need office space, but the required space per employee is decreasing. An increasing number of home buyers are looking for an opportunity to buy an apartment with a separate room enabling them to work from home. Either as an additional room or a separate small office.
While the last 10 years saw the offering of 5-room apartments in new developments as more of an exception, then in the coming years this will change and the selection of larger apartments for home buyers will improve. In offices, we see more and more shared jobs, and the successful organization of teleworking presents a strategic challenge for managers.
The mavericks will disappear
Real estate development following the restoration of Estonia’s independence has long been something that everyone can easily take up. This is also what led to the negative reputation for the word ‘developer’ during the boom. The growing number of regulations each year and the level of professional developers have today created a situation where the old understanding is no longer valid. It is simply not possible to deal with development as easily as it once was.
Here we are making a comparison with car production – it is inconceivable that everyone who wants could become a car manufacturer. Or even if they did – is the customer ready to buy this car? The process of designing buildings has become increasingly complex, both technically and legally, and experienced designers have years of experience, along with the mistakes they have made, from which to learn and do better next time.
The arrival of virtual reality
Concepts from the world of technology, such as VR (virtual reality) and AR (augmented reality), have reached a practical and value-creating output in real estate development. Their introduction helps to avoid mistakes, while raising the level of efficiency and helping the home buyer make better choices. An increasing number of sales are taking place before construction is completed. In such a situation, virtual reality solutions are a great help to the home buyer, allowing them to get acquainted with the development even before it is completed.
In 2021, we will see the further advancement of technology in the field of development activity, where the first AI (artificial intelligence) solutions will be used in the design of buildings. Apple, Google and Amazon are ready to create a common standard for the production of smart home gadgets, which will pave the way for new solutions to quickly reach every new development.
The year 2020 changed people’s values and established new trends when buying a home. In the beginning of the New Year, we will see even more growth in the expectations of consumers regarding quality. It is quality that will begin to increasingly dictate the market. Last year, those who planned on purchasing a home learned the lesson that it doesn’t pay to let an opportunity pass you by. 2021 will continue in the same way – pessimists will see difficulties while optimists search for opportunities. Pessimists will once again have the opportunity to say: ‘I told you so’, but not this year.