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If I had told you this time last year that we’d be in the midst of a global pandemic, with our borders closed, footballers playing in front of empty stadium, the AFL Grand Final was played at night in Queensland and Melbourne would be in lockdown for 3 months, there’s not a chance you would have believed me.
Yet, here we are.
The world is a crazy place and COVID-19 has changed it immeasurably, and possibly forever.
Like most huge societal and political shifts, these changes will inevitably be reflected in our property markets.
Priorities are likely to change, with some buyers willing to pay a little more for properties with “pandemic appeal”.
What do I mean by that?
Well, I think it’s fair to say that this pandemic has exposed some existing issues in both employment and housing that were easy to ignore in the past.
Remember the hard lockdowns of the public housing towers in Melbourne in early July?
At the time Acting Australian Chief Medical Officer Paul Kelly labelled them “vertical cruise ships”, and it’s easy to see why.
With busy lifts, shared hallways and communal facilities like laundries and garbage disposals, high-rise living is the ideal breeding ground for the virus, as we’ve seen both in Australia and overseas.
So, it stands to reason that the buyers of 2021 and beyond might not be so keen to live in an apartment and be breathing the same air and touching the same lift buttons as hundreds of other people.
Instead, they may prefer to purchase standalone dwellings that they can barricade and sanitise to their heart’s content in the event of another wave of the virus.
High-rise buildings were designed to organise as many people as possible in one place.
Health and hygiene were not a consideration.
However, in times of pandemic, it is necessary to reduce contact with everything that is used in multi-storey buildings: elevator, elevator buttons, door handles, surfaces and, above all, neighbours.
After forced self-isolation on different floors above the ground, often without a balcony or terrace, we will all desperately want to have a house, townhouse, villa unit or low rise, low density apartment. It can be small, but with a courtyard and a terrace where you can have coffee in the morning.
Throughout time, the primary function of the house has been safety.
Initially, it served as a hiding place from bad weather and predatory animals. Then, tall stone fortresses were built to prevent the enemy getting in.
More than an escape from routine and urban chaos, the house now offers a retreat from viruses and infections.
Urbanisation takes a step back as we relocate to small villages and city suburbs.
While apartments in high rise towers will be out of favour, those more spacious solidly built established apartments that we used to call flats, with their own balconies and no communal facilities located in our inner and middle ring suburbs will still suit many tenants and first home buyers.
We’ll also be saying goodbye to one of the main trends of recent years: open-plan spaces, with the entrance, living room, dining space and kitchen united as occurs in many of those newly built apartment towers.
In the aftermath of the pandemic, the entrance area will be separated so that we can leave our shoes, clothing and belongings on the street, rather than carry dirt into the living quarters.
Similarly we’ll be able to separate work and living spaces. We all need a Zoom Room nowadays.
This means that while single people will still be happy in a one bedroom apartment, once they have a partner in life they’ll be more likely to require a two bedroom apartment and once they start having children they will require even more space.
I can only imagine what a nightmare the stay-at-home orders must have been for parents with small children living in apartments without a garden, or for gym junkies forced to substitute cans of baked beans for their usual weights in their at-home workouts.
As such, room for a home gym setup, space for the kids to do their karate or dance classes online and a reasonable outdoor area for the family to get some fresh air and vitamin D are likely going to shift from the “nice to have” category into the “non-negotiables” list for owner occupiers.
The importance of neighbourhood.
Being locked in a Coronavirus Cocoon has shown us the importance of our third place – our neighbourhood.
Third place is a term coined by sociologist Ray Oldenburg and refers to places where people spend time between home (‘first’ place) and work (‘second’ place).
Social distancing during the COVID-19 pandemic made us experience many painful losses.
Among them were these so-called “third places” – the restaurants, bars, gyms, houses of worship, barber shops and other places we frequent that are neither work nor home.
If social distancing through coronavirus taught us anything, it taught us the importance of neighbourhood.
If you can walk out of your home and you’re in walking distance of, or a short trip to a great shopping strip, your favourite coffee shop, amenities, the beach, a great park, you will appreciate the benefit of the third-place – the importance of your neighbourhood.
While some people will move to regional Australia to have more space, the majority of Australians will want to continue living in our capital cities, but in lifestyle, destination locations which have great third places.
And it’s likely than in our new “Covid Normal” world, people will love the thought that most of the things needed for a good life could be within a 20-minute public transport trip, bike ride or walk from home.
Things such as shopping, business services, education, community facilities, recreational and sporting resources, and some jobs.
In planning circles, it’s a concept known as the 20-minute neighbourhood, and many inner suburbs of Australia’s capital cities and parts of their middle suburbs already meet a 20-minute neighbourhood test.
However very few of the outer suburbs would do so and are unlikely to easily do so because it’s about more than walkability.
For outer suburbs to become 20-minute neighbourhoods, then two key requirements must be met.
- Local development densities need to be increased which will better support local activity and services provision.
An introduction of a mix of uses into these neighbourhoods. This would bring more jobs and services close to where people live.
They would also have a range of housing to support a mix of household types, income levels and age groups.
This combination is often known as density plus diversity.
- Second, local public transport service levels need to be greatly improved.
Tenants, too, will have similar wish-lists, and savvy property investors will strive to cater to this.
We know that location will do 80% of the heavy lifting in your property’s performance and that some locations outperform others by 50% to 100% over a decade with regard to capital growth and it’s likely to be those liveable locations that will be highly desired.
The way we work and live
During quarantine, most of us were forced to work from home.
Of course there was a group of people who, on the first day after the quarantine, raced to meet colleagues and drink that office coffee.
But there are also those who of us who were not so keen to return to the office.
More attention will be given to the arrangement of the workplace at home.
Adequate home office facilities will be right at the top of many buyers’ property wish lists.
Anyone who has been forced to squeeze their laptop next to the kids’ schoolwork on the kitchen table or host a Zoom meeting in the spare room with the family washing hanging in the background will appreciate the need for a dedicated workspace in their next home.
Whether it’s for one or two kids to learn remotely or for mum and dad to work without leaving the house, a desk in the corner of the lounge room simply isn’t going to cut it in the post-pandemic property market.
Spatial organisation will change, with the place to work at home no longer a desk with a parody of an office chair and a lamp, slotted somewhere in the corner of the living room or under the stairs.
Now it will be a completely separate room.
Buyers will instead be seeking a fully equipped, sound-insulated separate home office with large windows, blackout curtains and all the required tech such as plenty of power points a strong NBN connection and an area for a Zoom green screen.
For sellers, this means styling the spare room or office zone appropriately, so people can really envision filing their reports or tallying up their accounts in the space.
Add some comfortable, ergonomic furniture and highlight the window for natural light, and you’ve created the ideal home office where potential buyers can run their empire while wearing their comfiest trackpants.
Other things buyers could be looking for post-pandemic might include a spare room to house a relative in the event of another lockdown, to avoid splitting up the family.
It’s not just the property itself that will need to meet these newly evolved needs – location will play a big part too.
Buyers will want to know they’re within the zone to have groceries and other supplies easily and cheaply delivered, and adequate storage for stockpiling (not panic buying!) could also be on their wish lists.
As everything around us evolves and adapts to this new normal, homeowners and investors must do the same, and view properties with a post-pandemic eye.
Looking at the bigger picture is key has always been key to your success as a property investor.
But more than ever, whether you’re hunting for a new place to live, looking to add to your portfolio of rentals, or sprucing up a property ready for sale, it’s absolutely crucial.
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
A perfect storm is brewing for our property markets in 2021-22, and you can trust the team at Metropole to provide you with direction, guidance and results.
In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.
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