Covid will be remembered as a watershed in human history and will have an indelible impact on our lives. Its impact on the future of real estate will be more centered on investment needs rather than end user needs. Covid will intensify the gradual change in real estate investment demand, which has been going on for some time due to the inherent dichotomy between the current real estate investment structure and the two key wealth management trends of digitalization and diversification.

Digitizing Now, technology is leading changes in consumer behavior. This effect is so common that for every rupee consumers spend or save today, a $1 billion startup is competing for its attention. The young population, their strong desire for relaxation, and the super entrepreneurial ecosystem will continue to push the boundaries of technology in all fields. In some respects, the pandemic has accelerated this digital adoption for at least five years, forcing companies to quickly develop strategies to stay relevant.

Unfortunately, the real estate industry has the slowest rate of digitization. For investors, the entire experience of buying and after-sales management is still a very stressful experience. Trust in technological infrastructure and one-click purchases may make the arduous real estate investment process no longer favored by many future investors for a period of time.

diversification Real estate accounts for 77% of the average wealth of Indian households, but HNWIs only allocate 30% of their wealth in real estate. The lower allocation of renewable energy to people with more disposable income suggests that investors tend to diversify their investment from renewable energy if they have a choice. Portfolio diversification is becoming more and more mainstream because it can generate better risk-adjusted returns and help achieve multiple investment goals. Affordability, liquidity and transparency are now key determinants of investment decisions.

Currently, real estate scores very low in all these areas. In fact, the huge financial obligations that must be undertaken by investing in real estate will squeeze out other investment opportunities from the investment portfolio. With the opening of various opportunities, this will inevitably have a negative impact on the future. In particular, non-traditional opportunities become within reach, making it easier to participate and exit.

There are global stocks, cryptocurrencies, P2P lending, funds, artworks, etc. Focus on commercial real estate As the uncertainty in the public stock and bond markets remains high, investors hope to hedge their risks by diversifying their portfolios through alternative investments. By definition, CRE is a property used for commercial purposes, whether it is an office, warehouse or retail store.

News Source : Construction Week Online