Residential market discussed at Mipim

Tim Harrup

One of the hottest topics in real estate over recent times has been the entry of the residential segment into the mainstream. The subject of emerging trends in the residential market was discussed during a presentation/round table at Mipim this week. Three speakers, from different styles of company, set out what is happening in the market, along with some innovative ideas.

First to speak was American-based company Realogy, which specializes in brokerage and allied activities and is active in 116 countries. They started by saying that after all that has happened during the past two years, it is certainly pertinent of Mipim to take a close look at the residential domain. Some of the ongoing trends include the fact that there is a great deal of liquidity in the market at the moment, and that interest rates are at rock bottom. The pandemic has accentuated a trend for house prices to rise across the whole of the OECD. And ‘residential’ no longer means just family houses, but the whole of the asset class (which it now is) from student flats to retirement homes.

Another factor which is likely to impact the residential sector over the near future is also a result of the pandemic. The move towards home working means that housing may be designed slightly differently, and the move away from offices will further highlight the trend for converting former office buildings into residential of one sort or another.

Building better

Moving on to the construction side of the residential market, Urban Splash, a construction company founded in the UK (Manchester) talked about what they refer to as MMC (Modular Methods of Construction). This equates to in a certain manner to pre-building houses in factories rather than on-site. The company said that our way of constructing had remained basically the same as that of the Romans. As a result of this lack of change, houses have become ever more expensive but no better. Which is the exact opposite of other modern merchandise (smartphones for example). And the system whereby itinerant workers move from one construction site to another was abandoned by all other industries (except construction) centuries ago.

Urban Splash is also very insistent about the fact that it is wrong to refer to housing in terms of ‘units’, or of financial vehicles… In fact this is forbidden and sanctioned by a fine in their offices. Houses are above all homes for people, and building the homes that people want is the only criterion that matters. Homes should be configured in the same way that cars are, with personal preferences playing a leading role.

The third company to speak presented a new (as yet untried) concept in senior living, but this will be included in the next article which deals precisely with this subject.