Residential Sector Topping The Charts In Global Property Investment

Real estate is dominating and surging high as it has scored a larger slice in global property investment. Industry experts have highlighted that the residential sector will exercise control over the global property market. As per the reports, global property consultant JLL mentions that by 2030, one-third of all global direct investment into real estate will occur in the living (Residential) sector, rising from 25% in 2020 and 14% in 2010.

The global property sector is having ascendancy over real estate as there is an expansion in established markets and accelerated growth in emerging markets in the Asia Pacific and Europe. The capital flow in the sector has accelerated over the past five years as the capital flows are most concentrated in the conventional multifamily or build-to-rent segments of the markets. Investors are increasingly recognizing the favourable ROI, growth opportunities and leasing fundamentals offered by these specific living assets. In 2020, approximately $200 billion in global capital was deployed into the living sector by investors globally, and with rising urbanization and other factors including housing affordability, the appetite of investors is anticipated to increase.

“Competition for living products has intensified globally, and there are no signs that investor appetite for this evolving asset class will abate. Recognizing the cash-flow stability and operational resilience of the living sector, particularly through cycles and periods of economic uncertainty, investors and developers have aggressively entered and expanded their position in the market and will seek to expand beyond established institutional markets,” says Sean Coghlan, Global Director, Capital Markets Research, JLL.

The substantial growth in the real estate sector and the returns and leasing performance allowed it to become the most liquid commercial real estate sector in the United States and are grabbing a major foothold in global investment-wise. Additionally, diversifying capital flows are leading to heightened levels of competition for on-market products and pushing investors into widening living markets – notably in parts of Europe and the Asia Pacific.

Here are the main reasons that are contributing to the heightened level of competition and pushing investors into previously developing residential markets.