On March 11, 2020, the World Health Organization officially declared that coronavirus was a global pandemic. Numerous countries were already under government-imposed lockdowns. Eventually, the virus enveloped the globe. In a matter of weeks, the world was turned upside down. Home isolation became a universal experience.
As we move forward, how will these events drive our preferences for built spaces at home, at work, and at play? The answers depend on how the next chapters are written, in terms of potential medical breakthroughs, the risk of a resurgence, and how each country and community navigates the delicate balance of safety and economic security.
Over the initial weeks of the pandemic, real estate market activity correlated closely with the severity of lockdowns. In markets that instituted “intelligent lockdowns,” there was minimal impact on listing volumes. Where measures were more severe, listing volumes plunged, but subsequently surged once restrictions were lifted.1
But will the pandemic alter people’s housing preferences? Weeks of confinement can shift priorities about where and how to live. How will demand change in various property segments?
Here are four possible trends that could drive local and international markets:
1. Urban flight
If employees are allowed to work from home permanently, many could turn their backs on expensive, high-density metropolitan areas in favor of the suburbs or smaller, affordable cities. Here, people can more readily own large, comfortable homes, potentially including a home office, workout room, and private outdoor spaces.
2. Second homes
Urban dwellers who remain in high-density cities could place a higher priority on second homes that provide a convenient escape—especially properties within an easy driving distance—in case lockdowns are imposed in the future and air travel is difficult or undesirable.
3. Luxury properties
It’s easier to ride out a pandemic in a home that’s flush with amenities. Within the luxury segment, there could be a higher demand for homes that offer health and wellness features like hospital-grade air filtration, lap pools, and full-featured gyms. Some luxury buyers may be interested in island properties where you can live off the grid comfortably.
4. Global economies
It’s too soon to measure the pandemic’s full impact on the global or individual country economies. Historically, however, times of turmoil generally improve the relative value of the U.S. dollar, creating bargains for U.S. buyers in some international markets—and driving up the currency-adjusted price of U.S. properties for some international buyers.
1See “The Pandemic’s Varied Effect on International Real Estate Markets,” by Mike DelPrete, May 20, 2020. mikedp.com