Social distancing and home working are set to alter the commercial landscape scene for the forthcoming future with behavioral patterns changing in response to economic conditions and social changes. This trend is predicted to continue, in which case realtors and other professionals within the real estate sector will have to adapt and implement measures in line with current sector trends. 

Property Prices:

Real Estate is a continuously evolving sector adapting to an ever-changing environment. The short-term effect on property prices as a result of the corona epidemic is sure to be affected albeit minimally. Current data based on global real estate providers indicate a decline in the purchasing power of buyers due to the unforeseen circumstance of a changed economic condition. This coupled with the global operational lock-down of commerce saw the immediate stop of property transactions, and the construction industry with sites uncompleted in the interim, and delays to existing and scheduling projects. Notwithstanding, it appears that demand has not been altered, but the economic viability of projects will have to be reassessed in the current economic conditions with the cost of projects expected to rise.

The advent of the property market boom may be at a standstill, but the relative movement of the sector is expected to continue.

Commercial Real Estate:

The impact on commercial real estate is becoming apparent with office spaces, retail stores, hotels, and restaurants having to adapt to new safety standards inclusive of social distance requirements.

The market for office space is at a crossroads, with businesses implementing a scheme of home working in the facilitation of government regulations for minimal contact. Going forward, commercial real estate providers have to adopt offerings that are customized and satisfy governmental guidelines for safety within working spaces, whilst also ensuring that client requirements are met

The immediate effect has seen a temporary downturn in the demand for office and other commercial spaces, mainly due to businesses now opting to downsize and find smaller locations or in some instances relinquishing the brick and mortar office concept as a cost-cutting initiative spurred on by the reduced workforce required at the office. 

In addition, the interim effect on the commercial space market would also require a reassessment of the contractual terms governing the relationships between space providers and occupiers, thereby allowing for a more accurate reflection of current market conditions and also an attempt by service providers to reach some form of equilibrium and retain existing clientele.

The commercial space market may be in for a tough period as the office space concept is being challenged.  Providers would, therefore, be required to be more creative in their offerings whilst implementing the necessary social distancing guidelines and protective measures as standard operational practice for a long-term recovery f the office space arena.

Rental market:

The rental market is experiencing slow, but not unusual activity. The demand for rentals, albeit the current market conditions is still relatively stable notwithstanding agents being unable to close on some transactions and renters unable to relocate as when required. The lock down has inhibited the ability to move freely.

The rental market shift could materialize with renters foregoing the high rental cost of living in big cities and opting to live in more price-friendly areas as working from home becomes a normal concept, thereby prompting people to rethink their living requirements.

The usual short let market could also be affected with companies specializing in this area of the rental market usually having most of their business during the holiday period, but with minimal or no traveling currently allowed it is anticipated that most of the short lettings may be changed towards long term lets as a response to the change in behavioral trends.

Overall, the rental market has been able to endure the immediate impact of the corona epidemic as letting agents are still able to agree on rentals albeit a delayed start date and provide options for viewings such as providing access to virtual tours for clients.  

Looking forward

With businesses looking to get back to operational normalcy, it is becoming apparent that the workplace and the usual ways of doing business are changing, with evolving practices requiring the implementation of improved health and safety.

The real estate market being very accommodating to changes is still evaluating the impact the current circumstances will have in the long term. Along with other casualties of the sudden global lock-down, the unprecedented circumstances give way to new challenges, but none the real estate sector has not experienced. Dating back to the 2008 financial crisis and the direct impact it had on the housing market, which in comparison, the impact of the corona epidemic albeit halting all activities on a global scale the effect on the housing market is yet to be as devastating as the 2008 housing market crash and may never reach that state.

Despite the comparison, the economic aftershock being experienced through unprecedented job losses and business closures have been unavoidable. With the gradual ease of the lock-down rules and a graduated reopening of commerce it is expected that business will eventually pick up, but at a slow pace.

For further inquiries on our real estate services we are available via the contact email below:

For further inquiries on our real estate services we are available via the contact email below:

Email: info@aixosng.com