As the lockdown, which was effected because of the coronavirus pandemic, begins to ease, businesses and cities are opening their gates once more.
Due to the lockdown, many industries stand the chance of a lockdown, and the future is uncertain for them.
However, apartment houses has continually stayed strong and is a fantastic opportunity for investment.
We all know that multifamily properties have, over time, been known for always resisting different economic storms and coming out strong.
When CBRE analyzed how past recessions affected the real estate market last year, they discovered to their amazement that apartment houses real estate has always done well and weathered the different recessions in 2001 and 2008.
Post reception, the recent recovery was always swift and was always ahead of every other real estate category.
The recession which hit in 2008 came with a decrease in the ownership of homes, and the request for homes for single families reduced significantly.
Due to this, multifamily properties were in high demand and remained so throughout the past decade.
Contrary to expectations, the request for these properties has shown no marks of reducing any time soon.
The real estate market has been expecting a downturn for some months now, even though no one saw the pandemic coming at first.
However, due to the successful history of multifamily properties, we believe that it will bounce back from any downturn and continue to scale higher in the face of all kinds of challenges.
How the Pandemic Has Affected the Multifamily Properties
Even though many people predicted that there would be a decline in residency because of the coronavirus pandemic, analysts however expect the dip to only last for a short while.
The nitty-gritty of multifamily properties will continue to impact its capacity to adapt to the short-term instability and also to the long-term recovery.
There is no denying that the coronavirus had a strong influence on the multifamily properties, but as usual, we believe strongly that this market will keep on showing its rigidity.
Trends in different demographics have continued to act as an advantage to the request for multifamily properties.
Since businesses have had to adapt to the lockdown and are choosing to perform businesses remotely, renting in contrast to owning is beginning to hold an appeal.
Reports have also shown that people who rented out high-end properties and also class B have continually met up with the payment of their rents throughout the months they had to stay home because of the lockdown.
This is mostly due to the fact that those who reside in luxurious apartments can easily carry on their jobs from their homes become most of them are usually in the information field or any other field closely related to technology.
Apartments that are built very close to professional businesses are bound to appeal to leaseholders more than the others.
We have also found that properties that are handled by professionals also have more capacity to adapt to the desires of people who would like to work from their homes.
This is because of the technological advancement they come with and other solutions for workstations on the site.
However, these are not the only reason why the multifamily market has continued to wax stronger. There are several other elements that play a part in this sector’s growth, and some of them include:
- Interest percentages are now at a record low
- Due to the economic downturn, fewer and lesser people are able to afford to buy a home; more people are choosing to rent due to the present circumstances.
- Properties that have technological advancement will have a more vital advantage over other properties due to the influx of remote workers because of the lockdown.
- The turnover of residents will reduce become more people are beginning to look for stability.
Even though the spending habit of consumers are reducing, and retail stores are beginning to either close-up or downsize, people will always need a home.
The request for apartments will always be there in all economic phases, and as the economy begins to make a comeback towards the end of the year, investors around the country can get even more comfortable with the investment they make into multifamily properties that those they have invested into other products.
What Role does Millennial’s Pay?
As the request for multifamily properties keeps on increasing, there’s a high chance that this advancement in the multifamily property market partly comes from millennial’s.
Over 20% of people above 25 years still stay at home, and that only translates to millions of people who are potential renters in the coming years.
The hike in the cost of possessing a property, debts by students, and the type of lifestyle people prefer are significant reasons why most millennial’s are choosing to resent instead of buying a home.
Builders are also responding to the increasing requests by developing apartments in urban locations with safe neighborhoods that are very walkable; entertainment and socializing opportunities are also created in abundance to attract those who might want to rent in an apartment community.
Many builders are also adding amenities like bars, cafes, parks, and several others to make the apartment house community even more appealing to renters.
What’s the Takeaway?
The laws guiding demand and supply are always in support of those who have chosen to invest in apartment house properties this year; the request for rental buildings by potential tenants has continued to increase with no sign of slowing down soon.
A survey has disclosed that most people do not really dream of possessing a building, and some of those who do possess a house wish they had leased instead.
However, some abound who simply do not have any plan to ever purchase their home.
With the high rate of residency, an increase in rent, and a short supply of properties, there is a high chance that requests for apartment house properties by investors will increase as the year comes to a close.
The price for properties will remain on the high side throughout 2020.