5 Post Pandemic "Trends in Real Estate" that are Going to Stay

I am always looking at the edge of socioeconomic trends that are emerging in the world. As a Real Estate Investment Consultant and a Managing Partner at an organization across 3 locations, it has become a second nature to notice the downward and upward spiral of the global financial market. The clock is ticking down towards the end of the year and with it, caution in the investment strategies of people has become more evident. 

Construction is the fourth largest sector in terms of FDI inflow and it's not hard to make out that COVID-19 is going to impact its financial equation and change the consumer behavior. While people around us are growing out of this crisis, their investment choices have changed behind the masks. The famous proverbial truth of real estate "location, location, location" is losing its stand for the first time since the last major financial crisis. 

If we take a global approach and keep the perspective to the multi-project and multi-city of the real estate world to encourage people to invest at the right time, at the right location, we can make out certain socioeconomic changes that are likely to emerge in the post-pandemic era. 

Here are the five trends I think are beginning to become clearer.

Safe Investments

Through several progressively policy reforms, the Indian real estate has grown to 12,000 crore in 2019. However, since the onset of COVID-19, investors across the globe has adopted a defensive investment strategy. They are making safe bets and channeling their investments towards safe havens. The investment market and Forex are in a volatile state. Gold is a good option, but at the moment, the real estate is our safest bet. Physical assets provide a sense of security and adjoining that factor, we're having home loan interest rates ranging between 7.15 and 7.8 percent, which are at an all-time low rate.  

Personal Crisis

A conclusive study has shown how the pandemic is taking a toll on people's personal life. It's gruesome. In the US, the divorce rate has risen over 34% and the stats are similar in the other developed and developing countries. Even in India, there has been an upsurge in the divorce filings. It's not a secret that divorce rates have an impact on the real estate market as the demand for new properties and sales rise. 

An upsurge in Online Sales of Property

One trend I am certain of is that the post-pandemic world will have a re-imagined way for showings. The physical visits are still prohibited across many cities around the world, and this has forced the innovation and adoption of new technology in the industry. I've personally made use of VR self-directed tours and used video and audio conferencing tools to seal the deals. The trend towards remote transactions in real estate is going to stay. 

Change in working habitats

The pandemic has democratized the remote work. Business owners and employers around the world are coming face to face with the fact that working from home not only increases productivity, it also vastly lowers the infrastructural cost of workspace. And with less commuting time, employees can focus more on work than maintaining their daily commute. The question that arises is that if working from a central location is not a requirement, why should we consider going back to the pre-pandemic way of working? And as the technology around the online workplace is improving, is it even necessary to punch in and out of your office door? This will hugely impact the workspace market.

Quality of life vs the prime locations

Investment analysis of Indian real estate concludes that most of the investments happen in prime cities. In India, about 70% of buying and selling translates in three locations - Delhi, Bangalore, and Mumbai. There has been a similar equation during the lockdown period. Here, the driving factor is profitability. However, now the investors, especially the millennials, are considering other key factors like space and quality of life over the financial incentives. The centrality of workplaces is losing its value, as working from home is becoming a new norm. These key factors will continue to gain value and popularity as we recover from this pandemic with our new sense of investing that considers the quality of life over the prime locations. 

The current pandemic has impacted the world in ways nothing else has in the recent past. However, it neither defines us as people nor the market. It's a mere milestone in our personal and financial life. The times are hard, but everything that truly matters will survive it. 

Stay safe. 

If you have a query on real estate investments, or even if you need a friendly set of ears - someone to talk to during these difficult times, reach out to me.