2024 Round Up: Real Estate and me - by Sam Gore
From a personal perspective, 2024 was a pivotal year for me, working towards my goal of moving away from direct selling of real estate to focus on my agent mentoring business, supporting and empowering agents to grow their businesses faster and to provide better service to their clients.
Despite this, I also enjoyed a bumper year in terms of commissions, putting me in the number 1 spot for income generation in the whole of the IAD Spain network for the 4th year running. This included my highest ever commission from a single sale. I achieved this purely from inbound referrals from my local network, which goes to show that when you’ve put the work in and know what you’re doing, people will seek you out to work with you.
In September of 2024 I ran the first round of my Sales Accelerator Programme, which garnered great feedback all round. Agents felt “empowered”. Their listing and sales volumes dramatically increased - in most cases immediately, with one client calling it “A game changer for agents”.
I also opened my doors to my one-to-one consulting business, helping clients on a much more personal level, by analysing their processes, their strengths, and weaknesses and providing them with tailored solutions and personal accompaniment. The results were incredible, with enhanced performance from the very first session, stemming from a broader understanding of client psychology and how to leverage it to achieve their goals.
Marking 2024 as a special year in yet another way, I invested in overseas property, in a location I knew was good for investment, despite others thinking I may have lost my mind. After so many years in the industry I have a very solid for market trends.
Fun fact: I purchased the property via video call, site unseen. And it was perfect.
I also travelled, and I spent time working on myself and the triggers that come with a new business launch, especially one so very personal.
Finally, I kept fit (but not that fit!), enjoyed my family, ate good food, drank good wine and planned for 2025! Let’s go!
And now for the round up for International Real Estate!
As we round off 2024, the global real estate market is anything but predictable— kind of an elaborate chess game with central banks, economies, and investors all trying to outmaneuver each other. If you’ve been keeping tabs on your property portfolio or just wondering where your next big move should be, here’s what you need to know.
Interest Rate Check-In: Who’s Cutting, Who’s Holding, and Who’s Crossing Their Fingers
United States
All eyes are on the Federal Reserve, which trimmed the federal funds rate in November to 4.50%–4.75%. Will there be another cut this month? That’s up to the inflation data gods. Early signs point to an 85% likelihood, but surprises are always possible. (MarketWatch)
European Union
Here in the EU, the ECB’s appears to be playing a long game. They’ve snipped their deposit rate to 3% and could trim it further, maybe to 1.75% by next summer, in a bid to nudge the economy along. Who doesn’t love a cautious central bank? (KPMG)
United Kingdom
The Bank of England’s taken a measured approach, cutting rates twice this year, settling at 4.75%. While further reductions are on the horizon, don’t expect anything too hasty—they’re still watching inflation like hawks. (MoneyWeek)
India
Meanwhile, the Reserve Bank of India is sticking to 6.50% but has injected liquidity into the market by trimming the cash reserve ratio. Why? Well, this is a tactical move that puts more money into the banking system without spooking inflation. (Reuters)
Housing Supply: Everyone Needs a Roof, But Where Are the Houses?
Urban housing markets remain under pressure as demand outstrips supply.
Europe: A Continent Under Strain
United Kingdom: In November, UK house prices rose by 3.7% year-on-year, marking the fastest annual increase in two years. This surge is attributed to a persistent housing shortage and robust demand, despite elevated borrowing costs. The average property price now stands at £285,000, intensifying affordability concerns for first-time buyers.
ReutersSpain: Major cities like Barcelona and Madrid are experiencing a housing crisis exacerbated by booming tourism. The proliferation of short-term rentals is blamed for contributing to the lack of availability of long-term housing, driving up rents. More than 60% of 18-34-year-olds still live at home, not helped by the fact that Spain's social housing stock is just 1.5% of all homes, compared to the European average of 9%. Prime minister Pedro Sanchez has pledged to build 184,000 new homes over the next 3 years, which sounds impressive until you learn that the Bank of Spain puts the housing deficit at 1.5 million, just to meet the European average Reuters
Italy: In Rome, the anticipation of the 2025 Holy Year has led landlords to convert long-term rentals into short-term accommodations for tourists. This shift has caused a 33% increase in monthly rents, making housing increasingly unaffordable for local residents.
Reuters
North America: Divergent Challenges
United States: Despite a housing shortage, there are approximately 5.6 million vacant homes across the country. Many of these properties are reserved for seasonal use or are awaiting sale, thus not alleviating the supply-demand imbalance. This discrepancy continues to drive up home prices, making affordability a pressing issue.
New York PostCanada: Urban centers like Toronto and Vancouver face severe housing shortages, leading to skyrocketing rents and home prices. The influx of immigrants and limited new housing developments have intensified competition for available units, exacerbating affordability challenges for residents.
Dubai: Ever the ambitious city, Dubai plans to roll out almost 9,000 villas before 2025 to keep up with the influx of luxury-loving expatriates. Yet, even with these bold initiatives, prices in prime areas continue to climb—perhaps those sparkling skylines come with a premium after all. (Business Insider)
Global Perspective
The World Bank estimates that by 2025, 1.6 billion people will be affected by the housing crisis. To accommodate the estimated 3 billion people who will need adequate housing by 2030, the world needs to build 96,000 new affordable homes every day. World Economic Forum
What’s Driving the Crisis?
A few common threads are driving the housing supply crunch across these regions:
Underinvestment in Affordable Housing: Developers are often incentivised to focus on high-end or luxury markets due to higher profit margins, leaving middle- and lower-income housing neglected.
Rising Costs: Inflation and supply chain disruptions have made building materials and labour more expensive, slowing down construction globally.
Urbanisation: The global trend toward urban living has concentrated demand in cities, where land and resources are finite.
Restrictive Policies: Zoning laws, lengthy permitting processes, and community opposition to new developments have hampered efforts to increase housing supply.
Geopolitics and Real Estate: The World’s Drama Isn’t Helping
Geopolitical turmoil and policy shifts are throwing curveballs at the property market:
United States: A strong U.S. dollar and the ongoing will-they-won’t-they of tariff threats are keeping international investors on their toes. The ripple effect is felt far and wide, especially in emerging markets. (Reuters)
Japan: Over in Japan, inflationary pressures are forcing the Bank of Japan to consider raising interest rates—a delicate dance influenced by domestic needs and international economic winds. (Barron’s)
Spotlight on Sectors: Who’s Winning and Who’s Struggling
Commercial Real Estate: Prime office spaces are still the prom queens of the commercial market, while less desirable locations are struggling to find takers. It’s the classic tale of quality over quantity. (JLL)
Industrial and Retail Spaces: Retail leasing is holding its own, especially in hot markets with limited supply. The industrial sector remains a darling thanks to e-commerce growth, but rising rates and supply chain snags are starting to make investors fidgety. (JLL)
Investment Mood: A Little Hope, A Lot of Caution
Investors are cautiously optimistic as global markets stabilize. But remember, it’s not all sunshine and rainbows—central banks are treading carefully to avoid reigniting inflation. If you’re diversifying your investments, pay close attention to the sectors and regions that are bouncing back fastest. (PwC)
This year’s real estate market has been like a complicated tango—graceful in some steps, chaotic in others. Whether you’re an investor, an agent, or just someone fascinated by the housing market, keep a close eye on central banks, geopolitical shifts, and those ever-elusive supply trends to know what’s what in the global economy.
Don’t have time or just find it all too much? I’ll keep you up to date here!
Published December 30th 2024
