In a recent article I wrote that, when it comes to the property market, it is too early to make accurate predictions about future transaction figures, or the duration of the ‘deep freeze’ in which the market currently finds itself. A week or so further down the line, and we’re still unable to make concrete forecasts.
What is becoming clear, though, is that when this moment passes - as it will - there will be no return to business as usual. Many of the changes that are being made today, for businesses and individuals alike, will irrevocably shape our behaviours, our habits, our modes of working and living. These are far broader, more macro trends, and - because they pertain to how we spend our time at home - they will impact the property sector enormously.
Covid-19 is forcing us to adapt quickly and at great scale. Personally and professionally, almost every facet of our lives is changing - our ‘office’ now consists of video conferencing and email, we shop for our groceries online, rely on technologies such as Google Classroom to educate our children and, at the end of our working days, we socialise with our friends via a screen, too. Anecdotally, colleagues, clients, friends and family around the world are sharing similar experiences. Finding a ‘new normal’ has become a necessity.
So, what does this new normal mean for property?
Well, in the short-term, we hunker down indoors. According to the New York Times, almost four billion people globally are now living under some form of lockdown. As for how long this will be the case, we remain uncertain. In parts of the world, such as China, we are seeing a gradual easing of these measures. But for many other countries it will be some time before we find ourselves closing the social distance again.
While it’s fruitless to speculate in that regard we can look at the longer-term picture and consider some of the larger shifts defined by our radically changed behaviour. These are innumerable but, for now, I will explore four.
Firstly, let’s take our homes - wherein every sphere of our lives now plays out. As such, our reliance on technology at home has never been greater. We need it to do our shopping, to go to work, to educate our children, to socialise, and to entertain ourselves. As the boundaries between our physical and digital worlds blur, we will see technology companies race to keep up with demand and enhance our everyday experiences through virtual and augmented reality. Property developers must be prepared to invest heavily in digital infrastructure in order to support these needs.
Many of the changes that are being made today, for businesses and individuals alike, will irrevocably shape our behaviours, our habits, our modes of working and living.
Meanwhile from a commercial point of view, what next for the offices that currently lie vacant all over the world?
Covid-19 will force us to re-evaluate how we view our place of work. Enforced isolation is proving our ability to work from home, with video conferencing and other digital tools allowing us to continue to successfully build the invaluable human relationships at the heart of our and many other businesses.
That said, I don’t believe that the pandemic will mark the death of the office altogether. While a renewed confidence in our capacity and ability to work remotely may encourage us to be more scrupulous – does every meeting need to be done in person? – there will still be a place for highly-valued face-to-face connection.
The post-Covid-19 office must be prepared to adapt to a generation that places a far greater premium on hygiene. This will necessitate making decisions about things such as how we ventilate office spaces and the spacing between desks. Already Cushman & Wakefield, the commercial real estate company, is seeking to answer some of these fundamental questions, as it helps thousands of organisations in China move people safely back to work.
The surge in flexible working will also lead to a new and increasingly untethered way of living. Over time, as lockdown measures lift, uncoupling the workforce from the office will gift many of us geographical freedom – will the old adage ‘location, location, location’ still apply as fundamentally?
If spending time working from an office becomes a luxury, rather than the norm, this opens up a ‘digital nomad’ mode of working, enabling people to work - and therefore live - from wherever they like. Infrastructural developments will be required outside of cities to reboot suburbs and rural areas, and to present accessible and affordable housing options, representing a significant opportunity for property developers and investors.
Finally, we will see Covid-19 kickstart a chain reaction of altered social priorities. In many ways the pandemic is already making visible the impact of our lifestyles on the environment. Data shows that China’s carbon dioxide emissions were down by a quarter during its lockdown - but, equally, experts are warning that the overriding effects of this crisis risk detracting both finances and efforts away from the fight against climate change. For the property market, increased awareness of the sustainability imperative will drive demand for environmentally friendly properties – both commercial and residential.
These are large, dramatic shifts, and they are just a few examples. For now, our focus is – rightly - on the short-term and helping you, our clients, navigate this very tricky, unsettling, but also ‘high potential’ environment that we’re in. Equally, in times of uncertainty there is great desire to understand what the future holds, what is likely to come next...
What we can say is that the disruption caused by Covid-19 is not temporary. Its impact will manifest itself across all facets of society and will be felt particularly keenly within our physical spaces: our homes and offices.
For those working or investing in the property sector, there will be challenging times ahead.
But, these are also transformative times; we are together experiencing a fundamental shift in what we expect and require from our very bricks and mortar – and indeed how these inanimate objects will make our worlds either ‘a better place’… or simply ‘another place’.