Megatrends and weak signals shaping future real estate

4.1 Forces of change for the future housing market environment

According to the respondents, the most significant force impacting the future housing market environment is environmental pressure and sustainability (Figure 1). Approximately 20% of responses named forces in this category among the three most important. Issues highlighted included negative impacts caused by climate change and the increasing role of sustainable development and the circular economy in housing construction. Natural hazards and, for example, sea level rise were seen to increase immigration and the number of displaced people needing accommodation in the future. In the responses, sustainability was also linked to sustainable building materials (such as wood or novel, yet unknown, building materials), energy efficiency, green energy and more ambitious sustainability certificates of buildings. In this category, the drive toward increasing self-sufficiency and nature-based solutions can be considered as possible weak signals.

Figure 1

The two second-largest categories representing the forces driving the future development of the housing market environment are digitalisation and technological development (15% of responses) and urbanisation (14%). Digitalisation and technological development include phenomena such as remote working and e-commerce as well as the increasing availability of diverse smart technologies and automatisation supporting living environment-related systems and services. In turn, the forces related to demographic drivers were mentioned in 10% of responses, ageing being the most prominent future force, e.g. the increasing need for accessibility in living environments. Another important force in this category is the expected decrease in household size. The respondents believe that more people will be living alone in the future, either voluntarily or involuntarily. Also, immigration was seen to influence the future housing market environment significantly. One weak signal related to this is the acknowledgement of cultural preferences related to the living environment and the inability of the currently available, often monotonous and monocultural, building and space stock to fulfil a greater variety of needs emerging in the future. Multigenerational living arrangements and the influence of tourism changing housing preferences can also be noted as weak signals.

Transportation and location resulted in circa 8% of responses, including forces such as an increasing need for both public and private transportation. Many emphasised the role of commuting and the fact that people aim to locate near their workplaces. This notion was somewhat contradictory to many other responses that manifested the future workforce as living wherever they wish thanks to remote working. Related to living environment facilities, many noted the increasing popularity of electric cars and the resulting need for home chargers.

The category including a variety of economic drivers as well as the category focusing on quality requirements established for living environments and homes were both named in approximately 6% of responses. Economic drivers deemed important for future housing market development are (global and local) economic development in general, interest rates, price and rent development, and the general affordability of housing as well as the progress of employment rates and purchasing power. Also, the availability of social housing and government subsidies for housing were seen to influence the future housing market environment significantly. Concerning the forces related to quality of living, several notions were expressed. Foremost, the desire for greenery and connection to nature was highlighted in the responses as well as the need for flexibility and adaptability. Preferences for privacy, safety and security were mentioned by many, as well as the increasing importance of design features and ease of living. The development trend concerning the size of living spaces divided the respondents. Some believed that more space is required due to working from home and that, therefore, people will move to less expensive areas to obtain the needed extra space. Others instead believed that people will live more compactly in the future due to affordability issues and urbanisation, or even be voluntarily driven by sustainable mindsets aiming to minimise space usage. Movable buildings, home-based micro-farming and intergenerational differences concerning living preferences (new generations are not eager to move into the spaces that have been occupied by senior citizens) can be noted as weak signals in relation to future quality requirements.

4.2 Forces of change for the future office market environment

When viewing the forces related to the future development of the office market environment, one force was preeminent (Figure 2). As much as 36% of responses were related to digitalisation and technological development. Remote working was seen as the most powerful future force, and the respondents were nearly unanimous in this opinion. The second-largest category (17% of responses) represents a variety of forces related to the quality requirements established for office spaces in the future. Flexibility, adaptability and multifunctionality were seen as trends that will increase their importance. Office spaces were believed to be increasingly shared as coworking spaces. Comfort and proximity to services were also mentioned. Concerning quantitative development paths, many believed that the need for office space will continue to decrease in the future. Among the responses, calls for safety, privacy and security can be identified as weak signals.

Figure 2

The third-largest category among office-related forces is health and wellbeing. Forces belonging under this category were mentioned in circa 10% of responses. This category also includes forces such as the increasing attention toward a work–life balance, social interactions, communication and a sense of community at the workplace, as well as the changing management culture, reflecting hybrid working and the transformation of work culture. Only 9% of responses named environmental pressure and sustainability among the three most important drivers of the future office market environment. Climate change and the need for sustainable (e.g. energy efficient) and circular solutions were the most prominent drivers in this category. The increasing desire to be connected to green infrastructure and enjoy nature as well as other green elements located indoors and the necessity of time management were weak signals in relation to future office spaces.

Transportation, accessibility and location-related issues were noted in circa 7% of responses. Similarly, approximately 7% of responses described the transformation of the nature of work, including issues such as an increasing number of self-employed, increasing competition and calls for professionalism, shortening work contracts, and the multidisciplinary nature of work. The rise of new occupations and the death of many existing work tasks were seen to increase the need for lifelong learning. Some respondents believed in the establishment of shorter workdays. As a weak signal in this category, the increasingly blurring boundaries between different companies can be noted. This development can be fuelled in coworking spaces. Surprisingly, less than 1% of responses named demographic issues (including, for example, immigration and demographic changes) among the strongest drivers of the future office market environment.

4.3 Forces of change for the future retail market environment

The survey respondents were very united in their views concerning the most important forces driving the future retail market (Figure 3). Two main drivers—digitalisation and technological development, and environmental pressure and sustainability—clearly stand out in the dataset. Digitalisation and technological development was named in approximately 27% of responses. E-commerce was named most often (15% of responses), but other forces included, for example, the increase in smart technologies as well as virtual and augmented reality. Interestingly, remote working was seen as a phenomenon impacting not only working but also the retail market, namely consumption patterns. Also, the increase in consumer data and the usability of big data were mentioned. Customer tracking and customer-specific data are not only gathered during visits to retail spaces but also utilised to steer customer movements and behaviour in the physical retail space. Virtual and augmented reality and three-dimensional (3D) printing were seen to change the shopping experience and lessen the importance of physical location. Retail premises were believed to be more digital in the future, including smart sensors, robots, trackers and automatisation, such as automatic restocking of products and the possibility to serve 24/7 in unmanned retail spaces. Technological development was also connected to logistics. Drones were often seen as a solution to the last-mile problem. One weak signal related to technological development was the belief that a smaller human workforce would be needed in the future. This development would impact the needed space layout of retail spaces because, for example, space for staff members and break rooms would be needed less and (human) accessibility to storage spaces and space comfort would not be an issue, but the requirements of robots would need to be considered via the implementation of, for example, charging stations.

Figure 3

Slightly behind digitalisation and technological development scored the category of environmental pressure and sustainability, with approximately 25% of responses. Among environmental issues, the respondents named climate change and its negative impacts, such as extreme weather conditions and the increasing possibility of natural disasters. Also, a variety of climate actions were mentioned. The increased climate consciousness related to consuming was believed to be demonstrated via, for example, preferring durable or degradable goods (such as degradable clothes) and second-hand products. The respondents also mentioned the general dislike of materiality and an increasing preference for consuming services instead of material products. Circularity thinking and recycling were seen as an increasing and powerful mindset among future consumers. Also, issues such as local and organic products, energy efficiency, and clean energy were mentioned as climate actions impacting the retail market environment. These energy solutions can be property-based or serve the local community. More developed environmental certificates were seen to gain even more popularity as a way to communicate with customers. Alongside environmental awareness, other aspects of responsible consumerism can be noted as weak signals, including, for example, a stronger emphasis of issues related to human rights, safety and transparency. Perhaps contrary to prior expectation, the search for unique experiences was mentioned by only a few respondents. One explanation for this could be the increased understanding of the environmental impacts related to these types of extreme activities, requiring vast amounts of energy and space.

While the category of digitalisation and technological development and the category of environmental pressure and sustainability gathered over half the responses, the next largest groups were transportation and accessibility-related forces (8% of responses), economic drivers (7%) and urbanisation (4%). In relation to transportation and accessibility, public transportation connections and the ease and comfort of accessibility around the clock in relation to retail services were highlighted. Also, the importance of logistics and the increasing number of delivery services related to e-commerce were seen as issues transforming the future. Economic drivers instead include the development trends of general economic factors, such as inflation, interest rates, disposable income, consumer confidence and employment rates. Surprisingly, demographic development was seen as an important future driver of the retail market environment in only 4% of responses. This category includes forces such as the ageing population, population growth, immigration and the evolution of family composition, namely the increase in single households.

When viewing the development lines of other quality-related aspects of future retail spaces, the respondents highlighted the importance of the flexibility and adaptability of retail spaces. In turn, their opinions were divided concerning the possible size requirements of commercial units. Some respondents believed in the continuation of the concentration development, which leads to larger retail units, whereas others saw that small shops would be increasingly popular in the future. Additionally, the role of physical retail space was seen to complement e-commerce by serving customers in a physical showroom or providing complementary service. What is surprising is that future quality requirements accounted for only 3% of responses. However, the increasing importance of creating an unique atmosphere in retail spaces may be a possible weak signal, as current retail spaces are much alike, and the shopping experience, as such, is very similar. Also, politics as a driver of future opening hours was mentioned by a few respondents.

4.4 Comparing the forces

Digitalisation and technological development were seen as the most important driver of the future development of the built environment in general (Figure 4). The most significant forces in this category are remote working and e-commerce. Environmental pressure and the drive toward sustainability are also seen as a powerful force shaping the future. It was named more often in relation to the retail and housing markets but less in the office market context. By contrast, space quality-related issues were highlighted more with regard to offices than for housing and retail spaces. In turn, demographic forces and urbanisation are especially linked to future housing market development.

Figure 4

When comparing the two respondent groups—business practitioners and students—some differences can be observed. First, transportation, accessibility and location-related forces were more often mentioned by practitioners than by students in all three real estate sectors. On the other hand, business practitioners saw the impacts of remote working influencing not only the office market environment but also the retail and housing market environment. In turn, sustainability was more often mentioned by students than by practitioners, especially in retail-related forces. A slight difference was also noted in office contexts, but in housing-related forces this difference is non-existent. Interestingly, in housing-related forces, more differences can be noted between the two respondent groups than when viewing the retail and office sectors. For example, the student respondents saw urbanisation and demographic development as more important drivers for housing than business practitioners.

5.1 Main findings and contribution

Several factors were identified above (Section 2) as influencing the real estate market environment, including economic and demographic drivers, public sector steering mechanisms, external shocks, and emotional factors (e.g. Dobrovolska and Fenenko 2024). According to the empirical findings of this paper, digitalisation and technological development, and environmental pressure and sustainability are the predominant forces perceived to steer the future built environment. This is in line with previous studies (e.g. Dufva & Rekola 2023; ESPAS 2019; PwC 2024; Richardson 2024; Z punkt n.d.). Remote working and e-commerce may shift demand patterns from centralised, corporate-owned spaces toward more dispersed, privately owned ones. This shift could influence the spatial structure of future cities, leading to increased vacancies in corporate spaces and a need for adaptive reuse. It may also place a greater responsibility on households, e.g. in space-related sustainability decisions. An increasing need for domestic space combined with the already alarming challenge of housing affordability (Saiz & Salazar 2020) may exacerbate spatial inequalities.

The identified force, environmental pressure and sustainability, can manifest in the market environment in various ways: as external shocks (e.g. natural disasters), through public regulation (e.g. the European Union’s environmental, social and governance (ESG) rating) or as a driver influencing future market preferences (e.g. voluntary sustainability certificates). Interestingly, in the respondents’ views, environmental concerns were less highlighted in relation to office than with retail and housing contexts. This is an alarming indication given that office spaces account for a significant share of the urban building stock and the criticism already emerging around superficial sustainability practices—particularly the tendency to overlook the unnecessary operational emissions from vacant spaces, and the preference for demolishing and replacing perceived lower quality buildings without accounting for the embodied environmental impacts of new construction (Huuhka et al. 2023; Lundgren et al. 2023).

The findings also indicate a low emphasis on space quality features in future retail spaces (3% of respondents) and living environments (6%) compared with office space (16%). This may be linked to the ‘flight to quality’ phenomenon (Gupta et al. 2022). Notably, demographic factors, despite being widely recognised as key drivers of space demand (Brett 2019; Mourouzi-Sivitanidou 2021), received limited attention in the findings. The issue is especially relevant given that most respondents come from countries with declining and ageing populations. In Finland, for example, two-thirds of municipalities are shrinking (Huuhka 2016). However, the established link between urban shrinkage and negative impacts on real estate markets (Bogataj et al. 2016; Weinsziehr et al. 2017) appears to receive little attention from respondents.

When examining variation across the different sectors, the prominence of forces, such as digitalisation and technological development, environmental pressures and sustainability, urbanisation, demographics and space quality, stands out, while factors such as transportation, location and accessibility, and economic drivers are weighted more evenly. Despite this, the two most mentioned forces, digitalisation and sustainability, accounted for approximately 44% of the total responses and are undoubtedly extremely significant drivers for future cities. However, there is a danger that the variety of the other existing forces will receive too little attention, which may create uneven resilience.

Another important observation is that location and accessibility seems to be displaced by novel forces. It is worth speculating on the future spatial consequences for cities if location were to diminish in importance. Similarly, economic factors, fundamental drivers of market dynamics (e.g. Glickman 2013), were mentioned in only 4–7% of responses. In addition, government policies, important market drivers (Dobrovolska & Fenenko 2024), appeared mainly in the context of sustainability-related regulation. This may again reflect the Finnish context, where high institutional trust could make government influence appear less unpredictable and therefore attract less attention (OECD 2023).

The identified weak signals are often related to technological and material innovations (either solving environmental concerns or adding space comfort) or to the possibility of experiencing nature in an urban environment or to be self-sufficient. The student respondents frequently named forces that were identified as weak-signal than the business practitioners. This highlights the important role of new generations when identifying potential novel future directions and the ability to imagine varying futures (e.g. Toivonen 2021; Comelli et al. 2024; Datta 2019). The capacity for futures thinking does not rely on, for example, organisational positions, but rather on one’s mindset, as further elaborated in the methods section. The survey also revealed that over 80% of respondents saw that the future time perspective should be longer than 10 years when acting in the field of the built environment, and almost 40% would prefer a time perspective greater than 40 years ahead. As built environment actors are often criticised for their shortsightedness (Toivonen 2011; Toivonen et al. 2023; Ratcliffe 1999, 2000; Wofford 2020), a relevant question is how this aim for a futures orientation should be applied in cities.

This study sheds light on the forces that steer the future development of urban environments. It presents both megatrend-type forces that possess high significance and high probability and proposes possible weak signals that can indicate new, possibly significant, yet still uncertain, development directions for the future cities. The local context and its impact on applicability are significant factors. Different real estate market participants, such as real estate owners, developers and the public sector, can benefit from the results when creating futures-oriented processes and strategies. The findings can also act as input data for both more detailed academic studies and corporate foresight activities focusing on particular forces. By monitoring and analysing the forces of change, it is possible to identify the general lines of development impacting the sector widely, but also detect the potential critical future development paths that may lead to possible future risks or opportunities for a particular real estate actor, location, timeframe, etc. (Gonzalez & Oosterlynck 2014).

The presented perceptions give a valuable understanding of the assumptions that steer grassroots-level decision-making, whereas many futures-oriented reports are based on the views of experts, consultants or researchers. These reports do not necessarily recognise in a transparent manner the grassroots-level perceptions (Bostanara et al. 2024), but can instead stress, for example, commercially or politically justified drivers that reflect the related preferred futures.

This study combined the three real estate sectors and compared their drivers while also giving a targeted review of each one. Futures perspectives have often been discussed in silos, and, in general, futures-oriented information does not effectively cross disciplinary boundaries. For example, weak signals are often studied in the specific fields where they originate and may be ignored in contexts that could be indirectly but significantly affected (e.g. the secondary impacts of pandemics, antibiotic resistance, an increasing number of mental problems, obesity and political conflicts on the built environment). When this type of knowledge is not likely to cross disciplinary or organisational boundaries and remains only as field-, generation- or status-specific tacit knowledge of a privileged few, the imbalanced knowledge increases, hindering the holistic futures resilience of urban environments (Toivonen 2024a, 2024b).

5.2 Limitations

When interpreting the results, some issues impacting their reliability and validity should be noted. The sample size in the survey is limited as further explained, and may restrict its ability to reflect the diversity of the global real estate market. Therefore, the presented forces should be treated as indicative by their nature, and the findings represent only the opinions of the respondents involved in this study. In addition, the data were gathered over several years (2017–21), and the respondents were not the same in the different questionnaires. Therefore, this inconsistency in respondent groups and the age of the data should be noted. The results are not a reliable source as such to prove changes in the development of individual forces or in the opinions of individual market actor groups over time. However, it is clearly seen in the dataset that, for example, pandemics were identified as an important future driver only after COVID-19 took place. This means that the respondents were able to identify a new pandemic as a potential future event relevant to real estate market development only when they had first experienced this possibility via COVID-19 (Florida et al. 2023).

The dataset includes responses from both business practitioners and students and from both domestic (Finland) and foreign respondents. It should be noted that respondents such as policymakers and institutional investors generally possess more influence over market development than student respondents. However, having less current power does not necessarily imply a reduced ability to identify future drivers, as discussed above. Also, the large share of Finnish respondents should be taken into account when considering the applicability of the findings, as their views may reflect a local context that may limit the generalisability of the results. However, due to Finland’s high level of foreign real estate investment (KTI 2025), the findings may be applicable to other international market contexts, as Finnish market actors are accustomed to considering, for example, global economic conditions.

Also, no major differences were found when comparing the views of domestic and foreign respondents, and the same forces were recognised among the most important drivers of future development. Nevertheless, the local context always determines how the impacts of a force are perceived from a subjective point of view, as discussed above. This paper focused on the residential, office and retail markets, while the industrial and logistics sector was excluded due to its minor role in the Finnish market and its distinct characteristic as justified in the methodological section, despite its growing global share (JLL 2025). However, exploring the drivers of the industrial market and conducting cross-sector comparisons would offer a valuable direction for future research.

When interpreting the results, it must also be noted that the identification of the weak-signal type of forces is much more challenging, because weak signals are not typically or generally acknowledged by the majority of respondents, and they do not possess a historical development path similarly to, for example, trends or megatrends. In addition, weak signals are inherently uncertain, both in terms of whether they will materialise and the significance of their potential impact, as discussed in the introduction section. Therefore, the biggest uncertainty when interpreting the results of this study relates to weak signals, and, as stated, they should be approached with caution (Ahlqvist & Uotila 2020). In addition, some of the identified forces are contradictory by their nature. For example, the respondents differently evaluated the expected size development of future retail spaces, urbanisation and multilocality. However, according to Kuusi & Kamppinen (2002) and Naisbitt (1984), it is very typical that forces contradict each other, and even an individual megatrend may contain several contradicting phenomena in itself.