Real estate has traditionally seen limited innovation - now it is undergoing of the biggest shifts in its long-standing history.
While this evolution in residential demand has been a few years in the making, the following recent trends have further accelerated this:
We live in unprecedented times. And here I am not talking about the pandemic. What I am talking about is us witnessing mega industrial sectors shift faster than anyone had ever thought possible. Real estate is one such industry. Traditionally, real estate has been relatively slow in adopting innovation. Today however it is now going through a big innovation wave as residential needs have shifted significantly over the past 18 months: Instead of just looking for a roof above their heads, today, residents are expecting hassle-free, convenient, and emotionally enriching living experiences.
Change in needs — the younger generations have different expectations of what living should look like. They believe in access over ownership, are happy to share resources, highly value flexibility, and are seeking out positive communal experiences.
Urbanisation — younger generations are still keen to live in the cities as they promise a better lifestyle, convenience, and opportunity. Even Covid-19 has not changed this thinking.
Rising rents — with more and more people moving into the cities, rents have skyrocketed, causing difficulties for many to afford housing, increasing the need for new living concepts that reduce costs without sacrificing the quality of life.
Sustainability — While the world population keeps increasing, the space we have available is finite. This means that we need to rethink living concepts and find ways to reduce the resources needed to house all of us.
Remote first lifestyle — Pre-2020, it was primarily the millennials and Gen-Z that were used to having the world at their fingertips; Covid-19 has turned this expectation from a niche into mainstream, as remote and digital-first has become the norm of how people live and work today, and in the foreseeable future
Mental health and well-being — Urban loneliness is on the rise and for the first time ever it is, in particular, the younger people that feel most lonely across all age brackets. Creating opportunities for them to socialise as part of a community needs to start at the grassroots levels i.e where they live and work.
The future of residential is social
Against this background, we believe that residential communities are offering enormous amounts of untapped potential for social wellbeing, service-sharing, and economies of scale. Not only are residential communities ideally positioned to respond and take advantage of the trends and challenges above, doubling down on empowering residential communities also unleashes additional benefits for operators and their residents alike:
Shared services — Strengthening your residential community will also enable you to offer additional shared services that could even unlock auxiliary revenue streams (think co-working, common rooms, mobility services, etc) while also improving the quality of life for your residents.
Social well-being — empowering your residents to get to know each other better, and connect with each other will result in an improved sense of community across the building/neighbourhood, and improve the quality of life and mental well-being of its residents. Helping your residents be better rooted within their surroundings will also increase their satisfaction and improve their retention rate.
Economies of scale — Last but not least, focusing on building residential communities also has a direct impact on your bottom line: by making more common areas available you can reduce the private space needed, improving the profitability of your operations. A strong community drives down your cost of acquisition as retention and word of mouth will increase, and also decreases operating costs through reduced maintenance needs as your residents start to care more about the space they call home.
And the beauty of all this?
Focusing on unleashing residential communities done right will in itself become a key for your growth, and can be seen as a reflection of the value and quality of the product you are creating. Additionally, it also kicks off a virtuous circle by increasing retention rates and word-of-mouth publicity while also reducing acquisition, maintenance, and operational costs, empowering you to make your community the driver of your business’ growth.
How to build residential communities the right way is however a whole other ball game. Keep reading about the 7 secrets of building engaged residential communities that we uncovered by speaking to 100 different thought leaders in this space to dive deeper into the practicalities of building strong residential communities.
And of course, if you are committed to bringing your residential community to start, but don’t know where to start, feel free to connect with me. At Obeyo, we are always happy to help.
About the author Michael Steinmann is the Co-Founder and CEO of Obeyo. With more than 15 years of experience in growing and scaling SaaS companies, he is always up for connecting and conversing about the present and the future of residential community building.