Real estate market after Coronavirus, that’s who loses and gains from the crisis
Well, many workers will be called back to the offices as the restrictions ease with the return of the pandemic alarm, but the world will never be the same again. Many companies will find it more convenient, thanks to the forced experience of these months, to let employees work from home. The implications of this turnaround will be enormous for the real estate market. We discussed it over and over again with ELVinvest’s Gianmaria Panini, who confirms the feeling that we are heading for a revolution with winners and losers.
First of all, the demand for commercial and worldwide properties is already collapsing. If many people continue to use telework, office space will be less and less demanded and purchase and rental prices will plummet. This will also lead to a redistribution of the demand from a geographical point of view within the individual states. If there is no longer any need to go to the office in large cities, being able to work from home, why should I continue to live in crowded urban realities, which above all have proved to be at high risk in pandemic cases as it has been noted in these months? Does it make sense to put up with traffic, smog, noise pollution, overcrowding and spend a lot to live in a few square meters, when I can work even hundreds of kilometers away?
And the demand for spaces for co-working?
The Facebook case can act as a forerunner.
The company will allow its employees to work remotely forever and whoever will do so will have their pay cut to adjust it to the reduced cost of living, based on the place where they have decided to reside. In a country like Italy, it would be a revolution with a significant socio-economic impact, as well as real estate. How many could stay in the south and still find a job employed by a company in the north, no longer having to move to move? If so, house prices will drop in large cities (see Milan) to rise in the suburbs and small cities on a more human scale, where the demand for real estate would grow.
In turn, demand would also undergo a qualitative change. By staying at home for many more hours, one would feel the need for more pleasant and less cramped environments. Therefore, the demand for medium-small and down-to-earth and large and renovated properties is down, with the offer for the latter to be above all higher in rural areas and, in any case, outside the big cities. . What about co-working? WeWork is experiencing a terrible blow from the collapse of the demand for areas shared for business purposes. One of the most crisis-hit markets is Singapore, where this business model has a significant impact on the real estate market, also due to the very high population density.
Foreign real estate market as a response to the structural crisis of the euro
However, telecommuting would end up benefiting realities like these. It is true, many will prefer to work from home, but many others would decide to find a comfortable place, equipped and with good internet connection to work in, near their home and away from large centers.
Provinces would benefit from this demand, which would once again be detrimental to cities. Moreover, the flexibility in terms of hours that teleworking offers employees would make these shared spaces attractive, where more people would be able to contribute to the rental costs and the payment of utilities, minimizing the costs of each to levels well below those that they would support by going to the office daily and / or living near it.