Political polarization and global uncertainty lead the list of current and emerging issues that are expected to have the most significant impact on real estate in 2017 and 2018, according to the annual survey conducted by The Counselors of Real Estate.

The poll involves surveying 1,100 of the organization’s members around the world. This year’s 10 most pressing issues are:

• Political polarization and global uncertainty. Intense political polarization and uncertainty around the globe are influencing decision-making at every level of government and throughout the business community. On an international level, recent elections in the United States, France, Austria and the United Kingdom point to resurging nationalism.
• The technology boom. Ongoing waves of commercial real estate technology innovations are expected to change the way real estate is bought, sold and managed.
• Generational disruption. Boomers’ and millennials’ divergent views of where they live, work and play increasingly affect the property markets. Real estate developers, investors, owners and builders will need to understand the location preferences of each group. One size will not fit all.
• Retail disruption. The trend toward transforming retail into “experiences” continues and is offsetting shrinkage in the physical (“bricks and mortar”) consumer goods platform. “Experiential” retail drives customer traffic to a more diverse and highly participatory environment targeted to a variety of age groups and interests.
• Infrastructure investment. Reliance on public-private investment means projects must have strong revenue-generating capacity to be funded, something most rural projects, and many water, electricity and road projects, particularly in struggling communities, cannot meet.
• Housing: The big mismatch. Safe, decent, affordable housing has been shown to have a stabilizing effect on urban economies, crime and public health. A current lack of inventory has generated a spike in home prices. A critical disparity exists between housing needs and housing supply.
• Lost decades of the middle class. After successive post-recession years of insignificant gains, median household incomes rose in 2015 by 5.2 percent to $56,516. Still, despite this welcome increase, middle-class incomes have yet to recover their pre-recession highs ($57,403 in 2007), and are actually hovering below inflation-adjusted levels from almost two decades ago ($57,909).
• Real estate’s emerging role in health care. Medical services are increasingly being delivered in clinics, urgent care facilities, and ambulatory surgery centers, reducing costly hospital visits.
• Immigration. The Trump administration attempted to enact relatively more restrictive immigration laws. In the meantime, companies ranging from tech firms to real estate finance companies bemoan the lack of qualified workers.
• Climate change. Warming temperatures are causing sea-level rise, and the implications extend well beyond those properties that might be directly affected by flooding. For example, access roads and key services may flood. Values of all properties will be affected.

In a written statement, The Counselors of Real Estate observed: “All of these issues are in varying stages of flux, potentially representing longer-term disruptive scenarios for real estate.”

Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser.