Real estate expert Avner Motaev picks out what will shape real estate in 2019

1. What will shape real estate in 2019? | Avner Motaev
What are the real estate investment trends for the rest of 2019?
Here are my thoughts to help you make better, more informed real estate
investment decisions in 2019.
Uncertainty continues to shape the real estate market
Brexit is the big unknown of course, but in Europe there are also concerns
about the viability of the governing coalition in Germany and the political
situation in Italy. Globally, let’s keep an eye on the renegotiations around the
North American Free Trade Agreement (NAFTA), and the trade war between
the US and China. Both are affecting market confidence.
A safe bet for 2019 is that none of these disruptors will settle any time soon.
I think that real estate investors may well benefit from an interesting side
effect from the saga that is Brexit though, and that’s the return of up to
132,000 EU workers from jobs in the UK to their home countries – an
opportunity for the economies of places like Hungary and Poland, which could
result in a boost in their domestic rental markets.
High demand and low supply signals potential problems ahead for real estate
markets
There is another key trend that will impact real estate prices in most European
markets, and potentially dampen activity – a lack of availability of suitable
assets.

2. Demand for properties is gradually rising, pushing prices and rents up as a
consequence. Which is great, for anyone who has already invested and is now
enjoying higher returns. However it's not so good for any potential new
investors, who may find they're priced out of entering an overheated market.
Low availability combined with potential changes in monetary policy (including
higher interest rates) and low yield levels, could all add up to a cooling of the
market this year.
In the US, we're already seeing what happens in a market where building isn't
keeping pace with demand. It’s creating an affordability problem, with over
half the real estate properties in the US's top 50 markets seen as overvalued.
Responding to this trend requires potential investors to be innovative– looking
at less traditional real estate sectors as an alternative investment. As always,
finding value in a tight market is key to getting a good return.
The tech revolution comes to real estate
Real estate is a sector that is ripe for technological innovation – but businesses
have traditionally invested little in this area. Recent research shows the
percentage of investment in tech innovation among European real estate
business struggled to rise above one hundredth of one per cent of total
production.
Proptech start-ups will shake up the market. In 2019 we’ll see how tech can
deliver innovative financing solutions for the industry, as well as tech (such as
blockchain) that will make transactions more secure and efficient. According to
the experts at Forbes, in 2018 around $5.2 billion was put into property
technology start ups. We’re seeing the impact of that now, in 2019.
Digital infrastructure offers a new opportunity for real estate investors
As the digital economy continues to grow we will also see more and more
investment in the infrastructure required to support it.
This means big opportunities for investors, as long as you’re prepared to look
beyond traditional assets and broaden your portfolio to include everything
from data centres to 5G network infrastructure.

3. Data centres are set to be an area of real opportunity. The experts at CBRE
suggest that much of this growth will be driven by Chinese tech and telecom
companies. It’s clear that where investors once put their money into rail or
utilities, in 2019 we'll see a rise in investment in the infrastructure that
supports the digital revolution.
Our advice for anyone looking to get into real estate investment in 2019 is that
it still represents an excellent investment option, both for short term rental
returns and the longer term.
But we do add the caveat that the market may be cooling off a little this year –
be prepared for potentially sudden interest rate rises and continuing
geopolitical surprises that could shake confidence in the markets.
There are still plenty of great opportunities out there however, particularly in
some central European markets. And technology will be the transforming
influence - it is going to be fascinating to see how it finally changes the industry
in 2019.