The impact of COVID-19 on Australian housing
You’re probably sick of hearing about COVID-19. As things start to look a little more normal, most of us would rather put 2020 behind us and move on to bigger and brighter things. The fact is, however, that many of us have had a lot of time to rethink how we’re living, and where our priorities lie. For some of us, this is because we’re now looking forward to working from home, but for others, it’s a matter of making sure that we’re happier in the space that we’re spending our recreation time in.
We thought it might be worth discussing some of the things that have COVID-19 has brought to the fore of the housing conversation, and outlining how they might impact the housing market in the near future.
Many major metro and regional centres have been feeling the rental squeeze in recent years, with skyrocketing property prices and low vacancy rates making renting a highly competitive market. For many renters, home security (as in either a long-term rental property with relatively consistent rent, or moving from renting to owning) is now a significant priority. This means that more people will be looking to enter the property market for the first time post-COVID, especially households that want to take advantage of low interest rates and/or have been able to save more because of reduced expenses due to reduced commuting during lockdown.
The amount of space we want
Having spent many of the last few months between the same four walls, most people want more space in their homes. And this isn’t necessarily just because they want room to be able to work from home, but also so that the living that they do within their home can be more comfortable as well. Remember, as many people move closer to their work (and more on that in a moment), they’ll be spending more time at home by sheer dint of no longer needing to commute, so enjoying the time you spend there becomes more important. For some people this could be over five extra hours a day spent in and around the home, so they’re thinking more about what they can do in and close to where they live.
In states where restrictions have had greater impact, people may be looking to entertain more at home for the foreseeable future. And, at least short-term, people who’ve made the investments in serious home equipment, whether that’s for working from home, or working out at home, are going to be looking for spaces that can accommodate that change in lifestyle.
Where we want to live
Traditionally people have wanted to live closer to their work so that they don’t have to spend so long commuting. But for those of us who are now working more from home, whether it’s completely from home or just a few days a week, there’s an interest in moving further out so long as there’s some kind of trade-off in terms of the size of the house or the block that it’s on. There are fewer people who are going to tolerate working from home in a shoebox with the noise of city traffic below them unless there are other benefits to living in the area, like great shopping or dining. Exactly what those people might be after will depend on the suburb and your target demographic, but it could be that the parks near your property become a bigger selling point as people want somewhere near their home where they can exercise, instead of heading to the gym.
Look, for all of the things that we can do, there are some things that we can’t. You can’t force someone to feel a certain way about your property, but you can stack the odds in your favour by knowing what the property’s strengths are and how they’ll appeal to your market. Keeping humble is important: there’s no single feature that will make or break a house if the rest of it doesn’t make sense to the market.
At least for the time being, even busy workers are going to be looking at their living space as more than just somewhere to keep all of their stuff. People who were previously content to live in shoebox apartments now realise that those spaces are difficult to actually live in.
The fact is though, it’s much harder to change the layout of a property, especially one that already exists, than it is to think of new ways to market it exactly as it is. Smaller rooms, particularly those without WIRs, have been marketed as studies for years; maybe it’s time for them to become home office spaces instead. We might start to see more living rooms modelled with hutches or dinky little workspaces in the corner. Places on larger blocks might be sold with the possibility of being extended with granny flats or similar structures in the backyard as a potential expansion point in the future. The point is that while what people want might have changed, the houses on offer probably haven’t.
A word on clairvoyance
If all of this feels a little vague, it’s because people are trying to predict the changes to the housing market in the wake of COVID-19, and if we could all see the future, then last year might have turned out a little differently. The fact is that we don’t know the long-term effects of the pandemic, but we can pretty reasonably guess that all of the houses in Australia aren’t going to be rebuilt to accommodate those wants, so it’s still about making sure that the house, as it actually exists, is marketed to the right demographic, and that you as a buyer know what will make or break a property for you. Picking the right house has always been about balancing up your wants with your must haves, and although COVID-19 might have shifted how important some of those things are, for many people the basic needs won’t change. They still want to be near the things that are important to them, and they still need space to live at home, whether that involves work or not. For buyers, nothing has really changed: buying a house has always been weighing up the price against the features that are attractive to you and your needs. Although priorities may have moved, even just temporarily, the same features that always made a house attractive will continue to do so. You aren’t magically going to turn a two-bedroom duplex into a sixteen-bedroom mansion, so focus on what you can do instead, and make sure that you’re targeting the property at the right market.