How does Tinder affect the real estate market? An unusual question that every investor should ask, because structural changes within society can also have an impact on the real estate industry.
The importance of long-term trends
Chris Urwin, Head of Global Research, Real Assets at Aviva Investors, discusses the connection between Tinder and the real estate market in an article he has written. In order to be able to understand the effects, however, it is important to be aware of the importance of social developments in advance. Because in view of the long-term investment horizon, according to Chris Urwin, it is essential to have a feel for structural trends in real estate. A change within society is accompanied by a different use of real estate. “For example, today’s real estate investors benefit from extensive knowledge of demographics, technical advances and the development of the labor market,” explains Urwin in his article. However, it is not easy for investors to recognize these processes. Fundamental social changes do not usually happen suddenly, but slowly and insidiously over several years or even decades. Therefore, among other things, shifts in the search for a partner are less noticeable and are hardly taken into account when evaluating real estate. On closer inspection, it becomes clear that such trend reversals definitely have an impact on the sector.
The “Tinder Effect”
Chris Urwin describes the possible changes in the use of real estate, which are triggered by the appearance and popularity of dating apps and online dating in general, as the “tinder effect”. These arise due to the differences between the “traditional partner search” and the “modern partner search”. In the traditional variant, the acquaintanceships take place in the family environment, among friends or at work. They are based on real encounters that take place during various activities or meetings. The “modern getting to know each other”, however, is based more on online acquaintances and virtual contacts. According to a study by Tyro Capital Management, most relationships begin online today, according to Urwin. Even if the effects on the real estate industry are not directly apparent, the new trend would still have a major effect on the segment.
Possible lasting effects
According to Urwin, for example, online dating is an underestimated factor when starting a household. “Today people marry later and later raise families. Often the reasons given are economic insecurity and high housing costs, which are undoubtedly important factors, but by no means the only ones, ”explains Urwin. The dating apps would make users more choosy as they promise better opportunities and lower costs when looking for a partner. As a result, the people in question did not get into what is known as a “last minute panic” and remained single for longer. This should increase the demand for rental apartments for single people. On the other hand, the number of divorced people could also decrease as a result of the optimized choice of partner on the dating platforms and lower their need for living space.
Furthermore, changes in people moving to cities and in the use of certain properties are conceivable. While in the past big cities were particularly attractive for other singles due to their high density of bachelors, the efficient matchmaking service of the dating apps can reduce this attractiveness and encourage people to stay in smaller cities. However, it is also possible that the improved establishment of contacts will further encourage the flow of electricity to the metropolises, as these are now even more interesting. The new ways of getting to know each other also mean that the first encounters no longer take place in bars, clubs or pubs, but take place on the Internet. The places mentioned are then more likely to be visited for a second, real meeting. Owners of such properties could restructure their properties specifically for dating events and thus further increase their popularity. Therefore, according to Urwin, casual fine dining restaurants may be more solid than one might think. In addition, the real estate expert believes that the trend towards so-called “competitive socializing” will increase under these aspects. Accordingly, game and adventure worlds are enjoying increasing popularity.
Working in the home office strengthens the development
Changing the partner search alone is unlikely to have any impact on real estate investors’ investments, but further developments can reinforce the effect and add weight. Technical progress leads to better and better networking of people via the Internet and makes it sometimes obsolete for several people to stay in one room together. Working in the home office can be seen as an example. The Corona crisis showed us that it is not absolutely necessary to drive to an office every day, because in many cases the work can also be done from the comfort of home. This trend is already causing the demand for office property to decline and may result in a profound change within the industry. The effect of increasing online connectivity should therefore not be underestimated. In the future, networking via the Internet is likely to increase further. Real estate investors should therefore ask themselves now what effects this development has on their own properties and how the use of the building can be adapted to the new conditions.
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