![]() ![]() More residential home builders are using prefabrication-where sections of a structure are built in a factory and then assembled on site-to improve productivity and decrease costs. In the US, a boom in construction startups that create or use such innovations attracted more than $1 billion in venture capital investments in the first half of 2018, a 30% increase over the total in the previous year.Ĭonstruction Methods. Organizations are starting to integrate such innovations as robotics, onsite drones, and building information modeling into routine construction practices. ![]() A technology revolution has upended the construction industry. Such trends are increasing interest in remote work, home offices, smart homes, and shared living, among other things.įive supply-side industry trends also affect what types of homes are built and how they are constructed.Ĭonstruction Technology. More than half of the world’s population now has internet access, and in developed countries, 65% of millennials and Generation Z interact with each other more through digital means than they do in person. As the economy becomes more digital, what people look for in a house is changing. They’ve also used infill development, which targets vacant or underused urban areas for residential housing.ĭigital Economy. To combat the issue, cities have approved such measures as inclusionary up-zoning, where a portion of new buildings in a given area are allocated to affordable housing. Rent increases that continue to outstrip wages, along with other factors, have contributed to affordable-housing shortages around the globe. Such developments have been bolstered by global pacts, including the 2015 Paris Agreement on climate change, which had been adopted by 195 countries as of early 2019.Īffordability. By 2018, 88 countries had mandatory or voluntary guidelines for building-related energy consumption or greenhouse gas emissions, compared with 38 countries in 1994. Consumers’ greater appreciation for sustainability and tighter regulations on energy consumption and green development are spurring the production of more ecofriendly housing options. At the same time, an aging population will encourage the development of larger housing to accommodate multiple generations living under one roof, especially in eastern countries such as China and India. By 2030, 43% of households worldwide will consist of just one or two people, increasing demand for smaller living quarters. Family sizes are shrinking, and the world’s population is aging, increasing interest in living spaces that are either smaller or larger than are typical today. ![]() This trend is already evident in big cities in Germany, where 80% of residential units constructed in 2018 were in multistory buildings, compared with approximately 60% ten years ago.ĭemographic Changes. By 2030, the number of people living in cities with more than 1 million residents will jump from 3.1 billion to 3.8 billion, a rise of 22%. People continue to migrate to cities, increasing urban density and the need for compact living quarters. (See Exhibit 1.)įive consumer trends influence where and how people want to live. The factors that are changing the concept of “home, sweet home” include both consumer trends, which are creating demand for new forms of housing, and construction industry trends, which affect how organizations operate and what they can supply. The Ten Forces Transforming Residential Housing If they manage to accomplish this, then they may retain or advance their current competitive standing. They will also need to use digital tools for just about all their tasks, including to obtain financing and to improve communications with end customers. Among other things, they must act early to secure property in desirable areas and use modern construction and building technologies to provide the types of dwelling units that people want to live in. For that to happen, building owners, real estate developers, contractors, and building materials manufacturers must transform the ways they do business. It’s not a given, however, that the construction industry can provide the types of housing that people will want in the future.
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