Lockdown, work-from-home, staycation - these are pandemic-era words we’ve all had to get used to. They’ve defined the way we live, work and travel, and have changed the dynamics of the real estate sector - one of the world’s biggest drivers of economic growth.
The global pandemic rebound is fuelling recovery in many segments of real estate. But uncertainty is still a big theme, as rising cases and new COVID variants threaten the return of movement restrictions.
Despite the uneven recovery, investments in real estate reached an all-time high in the third quarter, topping $755 billion, (670 euros), up 50 percent year-on-year.
And investors are keeping their portfolios diversified, with the residential sector now the most active segment ahead of offices, and driving 29 percent of transactional activity.
Behind the statistics and commercial figures the property market has always been profoundly affected by how people think and feel about design.
Interior designer Laurence Llewelyn-Bowen has spent decades working at that intersection between design, architecture and culture. He says tastes are changing with the pandemic forcing us to rethink our relationship with our homes.
"...architecture is a very very ponderous art form and will take decades - you know, an architect having an idea now will unlikely see the fruits of that idea for five, six years. People feel that there are very comforting ways to decorate now, and there are personal ways to decorate now, they’re decorating for themselves suddenly, rather than decorating for the estate agent that’s going to come around and value it or the work colleague that’s going to come around for a bottle of wine. Actually, people are socialising less, people are staying at home, and they are staying at home in these very comfortable, comforting, very domestic environments," says Llewelyn-Bowen.
During the COVID crisis, some feared for the real-estate market in Paris, which has been one of the world's most flourishing for decades. But prices are up again and prestige property is even booming: Both Sotherby's and Barnes say 2021 will be a record year in France. A positive prediction, but does it match the sentiment from buyers and sellers on the ground.
You might have met the Kretz family while watching TV during lockdowns. Their Netflix show called 'The Parisian Agency' tells their real story: that of a family business specialising in luxury real estate.
The founder of Kretz and Partners, Olivier Kretz, told the Exchange: "People are looking for apartments with space, with gardens, because they have suffered during the confinement. Big apartments without outdoors [space], prices went down or stabilised, and the others with outdoors, prices went up.
Valentin Kretz also believes more and more people want to realise their property dreams and put their plans into action.
"I think it's really a global trend. People during COVID had the time to think about their future project and now is the time to make this project happen.
He concludes by saying property remains one of the soundest investments: "Right now the investors and rich families want to invest, and they want to invest in a safe investment so what's better than real estate?"
So the pandemic has changed consumer trends, and how realtors are coping with the movement of people in big cities, but what’s the sentiment like for investors looking for bright spots to cash in on?
Sean Coghlan is the Global Director of Capital Markets Research at the real estate investment firm JLL in New York. He believes 2022 could offer many opportunities with sustainability and technology driving both design and innovation.
"We have entered this new era of living, working and playing, and we are still in that period of experimentation and there is still much to be determined, which creates opportunity. Sustainability is shifting from a nice to have to the only way forward. Technology, where groups have a lot of conviction, from an investor perspective, that could fit into a lot of different areas of the market. But I think it's a theme where you're going to see groups moving on opportunities in the markets next year."
So, Investors, designers and deal makers all agree that the property market appears to be weathering the COVID storm. But the pandemic, like climate change, has only just begun to reshape the sector and our society as a whole. Grasping psychology and culture is fast becoming as critical for developers as financial analysis. To win in 2022 then, property firms will need to adapt to a very different way of thinking about the spaces where we live and work.