The real estate industry in 2023 is defined by cautious optimism – participants are willing to look past cyclical headwinds like rising interest rates. It is, in fact, dedicating more attention to property assets and sustainable growth. It’s not surprising; some aspects of this sector are naturally returning to pre-pandemic patterns. Meanwhile, others have changed, as the pandemic and rapid innovations in the industry have transformed the way people perceive different types of properties.
Cryptocurrency has gained much popularity among industries due to Bitcoin’s meteoric rise in 2017 and Ethereum’s multiple innovative use cases. And while many industries were skeptical and reticent about them, the real estate sector experimented with digital money. You can technically check the Ethereum price on Binance and purchase a home with cryptocurrency; though, it’s a rare case, for now, at least.
With everything green and more concrete actions, 2023 is set to be a transformative year for the property industry, so let’s find out how.
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Materials transition and new construction methods to lower emissions
The world passed 8 million by the end of last year, experiencing the largest wave of urban growth in history. To accommodate such masses, new floor space would be added to the global building stock.
The eyes are on the significant carbon emissions. The building sectors generate 40% of the global CO2 emissions yearly, out of which building operations account for 27%, and embodied carbon – linked to construction and infrastructure materials, accounts for 14%. Achieving zero emissions is a futuristic goal and requires energy-efficient buildings powered by renewable energy, like hydroelectric energy and solar and wind power, and using fewer fossil fuels.
In 2020, the European Commission launched the New European Bauhaus, addressing the EU’s goal to create sustainable and inclusive places and ways of life and linking the European Green Deal to experiences and spaces. Every city, country, and continent has its own approach to achieving climate neutrality. Europe is on its way to becoming the “Home of CleanTech” in its efforts to become net-zero, trying to avoid creating other dependencies, as it already needs 18 times more lithium by 2030. By the same year, Saudi Arabia plans to have built the Line – a new sustainable, linear smart city with zero carbon emissions, streets, or cars incorporating the latest green technologies.
A More Holistic Approach Beyond The Carbon Tunnel Vision
Real estate business talks on climate change are mostly about carbon technology. The carbon tunnel vision, doing the rounds not so long ago, dominated last year, with carbon footprint, carbon credit, decarbonization, and carbon compensation being topics of major interest. Yet, only some of the industry’s frontrunners’, like NREP and Newsec in Scandinavia, succeeded in taking concrete steps towards a net zero by the end of this decade.
Only a quarter of the UK office market meets the Minimum Energy Efficiency Standards that require landlords to hold an Energy Performance Certificate, with the rest of Europe showing similar figures. And in New York, high-carbon offices worth $500 billion might be stranded as they’re not fully in line with green standards, and renovations are expensive.
The real estate industry is slowly but surely taking on the undertakings needed to achieve net zero, being open to the Paris Agreement and the New Green Deal, funding ClimateTech funds, and making Net-zero pledges.
This year, companies have acknowledged their role in fulfilling the demand for eco-efficiency more than ever, realizing they need to implement real solutions to stay relevant in the industry.
The Big Regenerative Movement
Nature is the master of innovation and adaptation. Rooftops, gardens, parks, forests – there’s an increasing need to feel more connected to nature. Public and private investment in green urban infrastructure might see a rise to $978 billion in 2023 globally, compared to $606 billion in 2022. Several green infrastructure projects include Boston’s Green New Deal, Champs Elysees’ green makeover for the 2024 Olympics, and Madrid’s Nuevo Norte Urban Forest.
The regenerative mindset challenges us to see the world differently from the standard decline in market creation and business-as-usual. Suppose sustainable design is about alleviating problems. In that case, the regenerative design focuses on promoting biodiversity, fixing what’s been damaged, and nature’s extraction of carbon from the atmosphere as infrastructure, furniture, food, and homes are produced.
This year, companies will ask themselves, “What will nature do?”. It will be less about skyscrapers and more about building natural spaces to nurture functions and connections. The real estate sector is healing the ecological and social systems that the world is connected to before it can create a sustainable and regenerative future for citizens. Regenerative architecture and design are gaining more attention, driving a significant regenerative movement.
NatureTech – The Next Big Thing
According to the World Economic Forum, 50% of the economy is linked with nature on some level. Currently, only 10% of marine areas and 17% of land areas are protected. The real estate industry is becoming increasingly aware of the need to protect the world’s land and oceans, with the UN Biodiversity Agreement being concluded in 2022. Governments are now committed to saving 30% of the water and land vital for biodiversity by 2030.
CleanTech 1.0 came to fruition in 2011, and ClimateTech, driven by the Inflation Reduction Act and the EU New Green Deal, is hot in this sector today. NatureTech differs from ClimateTech and AgriTech in that its focus is on the impact on nature and encompasses every technology that can allow, accelerate, and scale up nature-based solutions. Companies realize the potential of combining nature with technology, so NatureTech will mark the following years in a way that will be felt and seen by the average individual.
Companies struggling with deforestation can improve supply chain oversight to be able to access key markets. And Lo-tek solutions, Biophilic design, and Biomimicry are gaining more popularity at events.
The real estate industry is looking for new models, such as correcting damages and embracing nature-inclusive and sustainable practices. The transition era is continuing, and much work is being done to achieve a greener future.
