Regardless of Brexit or Covid-19 pandemic, it is heavy weight on heart to buy or sell a house. Investing in real estate is not just a matter of financial investment, it touches emotions and intricately linked to a person’s pressure on employment. Now, when the world is fighting against Covid-19 and even the major companies are concerned with their survival, the real estate is severely suffering.
What are the immediate changes in real estate industry?
The advent of Airbnb and rental hotels have somewhat helped the real estate over the last few years. However now, forget traveling to tourist places, people are unable to meet and go out to eat at restaurants.
Currently, service providers are fighting to mitigate health risks for their customers and employees. Several governments have rejected permit for construction during the pandemic, which has increased construction delays. Moreover, such prolonged suspension of construction activities would shrink rates of return. However, not every real estate asset is in trouble. The demand for self-storage facilities, data centers, and industrial warehouses have witnessed less decline.
What would be post-pandemic changes?
The coronavirus outbreak is bound to have a long-term effect. The public-health officials may announce stringent building codes to limit the risk of such virus outbreak. This could significantly change rules & regulations regarding HVAC, amount of enclosed spaces, and square footage per person.
On the other hand, the coming years would the most favorable period for baby boomers to buy independent and assisted place. However, the fear of such outbreaks may prompt them against making such huge investment.
The country-wise lockdown has increased online shopping and this changed demand would permanently change the outlook of e-commerce. Before the pandemic, customers were more inclined toward physical shopping. However, the post-pandemic world would rely on e-commerce more than ever. This drastic change is expected to boost the demand for industrial space.
What preventive measure could work?
Uncertainty is the major risk for the real estate market. Although the long-term consequences are hard to guess, one immediate impact is clear–industry leaders would take firm measures to maintain balance between capital preservation and strengthening foothold in the market.
Over the last few years, the market players have been integrating digital strategies to improve tenant experience. However, the coronavirus crisis has increased the need for those strategies and would force even medium market players to invest in developing digital and advanced analytical strategies. According to Allied Market Research, the global real estate market is expected to hit $8.66 billion by 2026, growing at a CAGR 2.8% from 2019 to 2026. This is because of the increased demand for industrial development and surge in public-private partnerships. The report suggests that complete impact of Brexit and uncertain economic conditions in Latin America would negatively affect the market.
Even though the battle against Covid-19 is far from over, some landlords have started to think about the post-pandemic investment. Several market players have invested in analytical technologies to study the behavioral data to understand the customer demands in the post-pandemic future. Rather than relying on conventional customer-driven surveys, real estate leaders are turning toward new technologies, futurists, and psychologists to find out answer. Although the uncertainty reigns the real estate market for now, with the help of innovative technologies, cash flow management, and smart marketing after the pandemic, market leaders would find more predictive insights.