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Property Development Trends For 2022 – Bernshtam

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2.4 billion people will be added to the world’s population by 2022, bringing it up to 7.5 billion in total (it is currently around ~7 billion). This represents another 100 million customers every year for real estate developers and investors like Bernshtam. A market larger than China and India combined. With this kind of population growth across the world, we can expect:

  1. Governments and municipalities to build more infrastructure, including roads, railways, and utilities. This will create a significant need for construction materials, such as steel and cement, which will benefit the mining industry.
  2. More people per private dwelling in cities due to shortages of the supply of housing relative to population growth rates is likely to be exacerbated by a possible weakening in the trend to smaller household sizes.
  3. Global property markets will continue their development into true world markets where price growth, interest rates, and exchange rate movements impact local real estate prices much less than ever before. This is largely due the ever increasing globalization of all aspects of our economies – including housing.
  4. Trends towards more compact cities are likely to reduce the use of private automobiles, freeing up space for other purposes. This could prove beneficial for public transportation projects, and the urbanization of suburban areas is expected to subside.
  5. There is a huge demand for living space in major cities – both historical core areas and new developments on the periphery – as people gravitate towards urban areas with better access to jobs and education opportunities. This is likely to result in a significant increase in high-rise living – a trend that developers like Aroland Holdings (TSXV:ARL) and North American Residential Partners (TSXV:NAP) are already targeting.
  6. There are some serious concerns surrounding the ability to provide sufficient water supplies in rapidly developing cities around the world, given current price trends, scarcity of resources, and the way water rights and access to resources are allocated. This may prove a major constraint for population growth in the coming decades.
  7. An economic slowdown is expected in some locations, which can be partially attributed to increased regulation, tax rates, and rising energy prices. On the other hand, new developing economies are likely to offer opportunities for emerging companies with the right know-how and, of course, the capital to invest.
  8. A continued trend towards a greener economy is expected as governments attempt to reduce greenhouse gas emissions in order to meet climate change targets agreed on at COP21 in Paris 2015. This will likely lead to reduced urbanization if only for negative reasons – i.e. because the increased cost of living in cities becomes prohibitive for low and middle-income families.
  9. Cities that can effectively manage their growth will enjoy significant benefits, such as lower pollution and reduced commuting times, which will improve quality of life and encourage further investment in urban areas. The best opportunity to achieve this is by creating compact, mixed-use developments that provide an attractive alternative to suburban living for people of all income levels.
  10. We expect the trend toward more sustainable cities, including the creation of pedestrian-friendly areas with lower car use and greater green spaces, can be expected to continue in mature markets as well as new ones.

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