Lockdowns, the pandemic and climate change have impacted so heavily on the nation that the real estate industry is poised for massive changes, which are set to reshape our work and lifestyle environments.
The Real Estate Institute of Australia (REIA) released their Megatrends for Australian Real Estate Report 2021, which identified nine key issues facing the industry, with the pandemic and climate change the key priorities.
The report has found that more than ever, the industry needs to look beyond the traditional sector and historical trends to identify future threats and opportunities.
REIA President, Adrian Kelly said the COVID-19 pandemic and the climate change crisis has blurred the boundaries more than ever between work, family and leisure and this is creating severe issues for the real estate industry.
“Prior to COVID-19 there were already signals of a ‘portfolio approach’ to life, where people sought to create balance between work and life through flexible work arrangements and adoption of technology,” Mr Kelly said.
“This is particularly true for white collar workers. Previously, working from home was an option available only to a few, with employer scepticism of employees’ ability to perform in a non-structured working environment.”
Mr Kelly went on to explain the misconception about productivity when working from home was disproved “almost overnight”.
“Numerous studies point to a third of the workforce wishing to remain remote full-time, a third wanting to work one to three days under a hybrid model and only a third wanting to return to an office full-time,” Mr Kelly said.
“While social scientists point to the role that structured work plays in our social fabric, especially for younger workers, what isn’t yet known is how much structured work is required to build organisational culture and ensure wellbeing of employees.
“This leaves unanswered questions for the corporate sector and in turn commercial real estate for the medium to longer term.”
Mr Kelly said a challenge for the property industry is to navigate this transition and help create workplaces that incentivise employees to engage with their companies and return to commercial real estate.
“To accommodate working from home, evidence points to buyer and renter preference for outer suburbs, compared to previous preference for inner suburbs,” he said.
“Vendors and renters are seeking homes with more liveable space, including bigger gardens and more space, for example entertainment rooms. Those that can afford it are having a family home out of the city and a city base.”
According to Mr Kelly, beyond the walls of residential and commercial property is a trend towards increased and enhanced green spaces, especially around higher density town planning.
“A focus on increasing activated green spaces could help to mitigate the trend of escaping the cities,” he said.
“Likewise, a focus on precinct circular economies and zero waste programs will provide opportunities, but also challenges to traditional planning approaches.”
Mr Kelly said that with health experts predicting another pandemic is likely, public health will remain front of mind for public policy and design decision for the foreseeable future.
New tools such as big data, artificial intelligence and synthetic biology have emerged.
“The work of one consortium, MetaSUB, to map the microbiome of 54 global cities has implications for sustainability, security, safety and urban planning,” Mr Kelly said.
“This megatrend has been accelerated by COVID-19 with growing concern about the presence of viruses in built environments.”
Mr Kelly added that the development by biotech companies of testing kits for businesses to test objects, such as door handles, pin pads and handrails, that could carry the virus opens up opportunities and challenges for commercial real estate tenants and owners.
