Four real estate trends in the coronavirus pandemic

Rating

Four real estate trends in the coronavirus pandemic

100 %

0 %

Rating

Monday, 14 december 2020 | Redacción CEU

The arrival of the coronavirus pandemic has not left anyone indifferent. In a few months, this virus has turned our lives upside down. This crisis is changing the way we work, study, buy, interact... In short, the way we live. Just as expected, this situation has also had a great impact on the real estate industry, which is a sector closely related to one of our primary needs as human beings: the search for shelter. In our homes we feel safe and protected against this virus. In addition, this crisis has forced us to spend a lot of time inside them. And that is not all, we hardly ever visit other houses these days, either to stay in them for holidays or to see our relatives. Therefore, our houses have become leisure centers and temporary offices. They have become delivery centers and improvised gyms too.

Although we hope that this will be a temporary crisis -since the arrival of the vaccine sows hope-, there are many things that will never be the same, both at a global level and in specific sectors such as the real estate market. Today, in CEU IAM’s Blog, we analyze four real estate trends that the spread of coronavirus has brought about in Spain. Have these trends come to stay or are they just fads?

A bet on new housing

The first wave of this crisis revealed a certain fatigue in the Spanish housing market. It is not surprising that spending so much time in our homes makes us reconsider what we really want them to be like. In fact, property platform Idealista points out that between May and October searches for newly built flats and villas increased by 36.8%.

It is not easy to predict whether this preference for new housing will last over time, as it must be taken into account that this rise happened just after leaving a strict lockdown. Nevertheless, the Via Celére Observatory for housing in Spain indicates that in the next five years 42% of Spaniards are planning to change their homes, and two thirds of them would go for a new one. The main motivation they highlight is the search for better housing.

The need for a place to telecommute

There is something that seems to have come to stay: teleworking. Surely, many companies will not bet on working remotely, but last months have served as a testing ground to accelerate the transition process towards a hybrid model. Likewise, 72% of the professionals who have worked remotely these months prefer to continue doing so. If companies want to attract talent, they will have to bet more on teleworking.

What does all this mean for the housing market? Either because they work remotely or because they want to be prepared for it, many professionals have realized that they need to have a suitable workspace within their homes. This aspect has had an impact on the sales of desk furniture, screens and laptops, as well as on home searches. Spaniards need a place to telework. In order to respond to this demand, many building companies are adapting their plans, providing more spacious housing or building homes with an extra room. They are also trying to meet new clients’ expectations such as flats having terraces or balconies.

What will happen with offices? A greater bet on teleworking does not have to provoke the disappearance of offices, especially considering that the preferred model is the hybrid one. In any way, it seems to be making way to a new conception of these spaces: more flexible and focused on people offices, conceived for meetings, with green spaces, etc.

A digitized market

Spaniards have not only embraced teleworking in recent months, but also e-commerce. It was expected that this change in customer behavior would take place little by little over the years, but the coronavirus crisis has served as a lever for this change to come earlier. At the same time, the use of video calls and online education has spread. Even older generations have begun to become familiar with the use of digital technology.

It is a trend where there is no turning back. Therefore, it will also have a substantial impact on the real estate sector: visits to homes with VR, communication with clients through video calls, smart contracts, real estate crowdfunding, etc. Favorable winds for the so-called proptech companies!

A change in the fate of houses and business premises

One of the consequences of the drop in tourism has been the shift from tourist rentals to traditional ones. In this case, this looks like a temporary response from their owners in order to weather the crisis. Everything seems to indicate that, when this pandemic ends, these houses will recover their activity.

On the other hand, the fate of business premises is more uncertain. Their demand has decreased in these months as a result of the harsh effects of the crisis. Another important factor for these stores is the aforementioned e-commerce boost. The coronavirus crisis has accelerated the process of digitizing work and services. Thus, in some cases, it is no longer necessary for business to have a physical presence.

How does this affect business premises? The impact may be greater or less depending on their location. On the busiest streets in big cities the impact is undoubtedly less negative. Indeed, this does not mean that the commercial property market will be drastically reduced, but rather that those who are affected will opt to transform these premises into homes. This trend can already be detected in several regions in Spain, especially in large cities. Another use that can be given to these premises is to turn them into logistics centers or shopping warehouses.

At the CEU IAM Business School, we offer different training courses that are specialized in the real estate industry: from several focused programs to a Master's Degree in Urban Planning. Ask for further information with no obligation on your part!

☆

Rate this article