Imagining a post-COVID-19 world of real estate

Abstract

The Covid-19 pandemic has triggered abrupt and enduring changes in almost every aspects of our life, society and economy. Although the real estate sector is generally slow to adjust and evolve, this pandemic is causing swift, far-reaching consequences for the sector. Changes are likely to be widespread, encompassing all sub-sectors of the industry. While the situation is still fluid and full spectrum of the impact of it is yet to unfold, we put forward some thoughts about those changes and speculate on the trends that may shape how the sector would look like in the post-Covid-19 world.

Sustainable Construction Investment, Real Estate Development, and COVID-19: A Review of Literature in the Field

“…Most researchers consider how the COVID-19 pandemic could change the choice of households and residential areas. Due to mobility constraints, many urban residents living in urban centers lack a private yard, and the residents of remote suburbs, particularly those at risk, may feel isolated [94]. Gupta et al [93] followed the example of the US from December 2019 to December 2020, when the prices of housing far from urban center areas rose faster than those in city centers.…”

“…The introduced restrictions on movement and social distance requirements forcing people to work from home may significantly change the demand for office space [77], because a large proportion of those working from home are likely to survive the crisis even after the pandemic. Restrictions on free movement, according to Carson et al [94], have forced less technology-oriented sectors to relocate their activities to the internet, thus reducing the need for offices. As long as social distancing measures, which can be quite protracted, are necessary in the workplace, the space required per employee will increase significantly.…”

“…As long as social distancing measures, which can be quite protracted, are necessary in the workplace, the space required per employee will increase significantly. This may lead to unexpected, significant changes in the demand for commercial real estate, but overall, a significant decrease in space is reasonably expected [94]. While looking for cost-effectiveness in creating workplaces, Billio and Varotto [86] accept that it would be much easier to create workplaces in the suburbs near residential areas where employees live.…”

Pricked by the Virus for good? Real Estate Bubbles and the Grand European Shutdown

“…Carson, Nanda, Thanos, Valtonen and Xu (2020) along with Hoesli and Malle (2021) underscore divergent price behaviour of different forms of real estate which they expect to persist through the crisis -industrial and residential real estate price appear to be sticky, while office buildings, hospitality and retail properties might continue to take the beat pricewise. Carson et al(2020) even fear that commercial real estate may retreat from the high street into online presence forever as a consequence of this giant shutdown.…”

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“…In literature, one can find diagnoses of how the spatial management system should adapt to the new conditions (general and specific). In this context, the need to redefine the role of public spaces (to enable the use of solutions enabling social distance), to question the concept of dense cities (Bailey et al, 2020), to adjust the planning solutions to the changing demand for office buildings (Carson, et al, 2020), to modify the public transport and to promote specific forms of transport (Acuto, 2020), are indicated. The new conditions also promote a more in-depth approach to smaller areas (i.e.…”