COVID-19 has had a marked effect on just about every industry in the world. Effects that will continue to influence life and work well after the pandemic has blown over. The real estate industry is no exception and one of the significant changes that have been brought about by the outbreak is the rising popularity of working from home. While this practice is currently a necessity due to the restrictions inherent to this pandemic, work from home is here to stay. Even before the coronavirus, workforces were starting to slowly move towards work from home. The lockdowns and quarantines only accelerated a trend that already existed.
One of the clear consequences of more work from home would be a shift in preference from expensive city centres to more luxurious suburban areas. As the value of being able to walk to work decreases, it is reasonable to expect an increased interest in real estate outside of the major cities. This may have a real working impact on the urban property markets. Having said that, we do not expect cities to become desolate. Not by a long shot. Cities have infrastructure and facilities that have been built up over decades. These are nearly impossible to replicate in suburban sprawl. Not to mention the many leisure activities that only cities can provide.
Focusing on residential real estate, there would be a rise in demand for well-designed home offices. Renovations or rent turnabouts might need to consider as more and more workers turn their homes into workspaces. A large, well-lit and comfortable home office will be far more enjoyable than a stark and dim one. In the absence of a home office, computer bars or communal workspaces, possibly at a dedicated floor might be advisable.
As this past year has proven, a large number of activities involved in real estate can be performed over the internet without direct contact. Everything from giving tours of the property to collecting rent can be done online now. It seems likely that remote work is the future. However, there is still much scope for such online services to be brought to the mainstream. Therefore, we expect an influx of property management applications as more and more people look for convenient online management solutions.
Corporate real estate seems to be the one niche that may be affected quite acutely by shifting to work from home. As workers become less tethered to their offices, often performing their jobs with near-zero human interaction, employers will be more likely to forgo expensive or luxurious offices. This was foreshadowed to some extent before COVID with companies like WeWork. Also, the transition to working from home has been a largely painless one in developed areas because technologies like video conferences and cloud shared work files already existed beforehand. While there may be some scope for office spaces to be reopened or reused in more than one fashion, the scope of this sub-field might be reduced noticeably even post COVID.
It is as yet unclear how the work from home trend will change the status quo in some fields. For instance, education. While we may reasonably expect high schools and universities to open back up after the pandemic, (given their practical aspects of study) the same cannot be said about lower grades of school. Further information will need to be collected to check how/if working from home has affected children’s academic progress.
As work from home becomes more prevalent, companies will be able to employ talent from further and further away. This may lead to significantly higher interest in non-major cities with high standards of living. The suburban equivalent to tier 1 cities.
In conclusion, work from home is unlikely to go away after this pandemic passes and real estate will adapt to the changes that will bring about. While the precise nature of those changes may be beyond our reach, we can certainly make an educated guess and use past data to decide how best to proceed as we move ahead.