Perhaps the biggest question on many of our minds today is what could the world or Australia look like post COVID-19?
There are a number of options although they appear to become more complex every day. One is a recovery back to the way things were, perhaps optimistic, but not impossible. Another is a complete upheaval. Another is a new-normal made up of fragments of the familiar mixed with lots of change.
However, as the circumstances we face involve a complex mix of health, economic and social impacts a return to the status-quo looks widely optimistic. Even more so as COVID-19 is impacting every household, every community, every state and every nation on earth.
Mid-way through 2020 if we just concentrate on the housing market as our key topic, it looks wise to consider all options, and it’s also constructive to have an open mind to an entire range of possibilities.
Shutting out this or that option or following some sort of pre COVID-19 plan might not be wise or even possible. At the very least it looks to be a time of co-operation that engages the whole community and the brightest minds and that applies as much to housing as it does to any other question.
One fact appears certain and that is COVID-19 has impacted all of the world’s social, political and geographic boundaries which now appear to no longer matter. Perhaps today more than ever we have come to appreciate how small the world, right down to our own local community, actually is.
Housing is an area for example where everyone agrees that Australia needs more homes and that cover the full-spectrum of our society. But how they are built and financed, and where they are built often has us wondering if there will ever be enough?
COVID-19 has acted once again to bring into very sharp focus how we might answer this complex and decades old question.
Here’s a suggestion – let’s start close to home not from some remote economic point of view, but from a position that’s more down to earth, in the front line of how residential property might change post COVID-19. Why? Well that’s easy because as COVID-19 has swamped our daily lives most of us returned home. Many of us returned home to isolate, returned home to be safe.
And so, our homes, suburbs and local community looks a pretty good place to start. Across Australian cities home is where many of us have spent the majority of our time for the past three months. Home is where we feel secure and where many of us are now working.
Walking home recently I made a few mental observations that strike me as markers in how we might emerge Post COVID-19.
I found myself walking past dads and sons chatting, mums with kids and dogs in hand, what might well have been families engaged with each other in very simple pastimes, but with lots of obvious energy and these were happy groups.
Then as I glanced through the odd open-to-view living room windows, as it’s early evening blinds are not yet closed, I saw people with their eyes still glued to a computer screen or more often than not, there were two screens, and I also hear the occasional sound of real musical instruments playing.
And finally, I was aware there are very fewer cars on the road and the skies are clear and spotted with many more stars, and they strike me as brighter and more numerous.
But also, I saw a police cars’ lights are flashing just-ahead, and I hear the words from the police officer ‘and don’t do it again’ in a friendly tone that suggests a shared, if unspoken fate. I ask myself are any of these clues to what our future might look like living in any big city or country town?
Subsequently I’ve found myself wondering where will 2020 end up in the history books? Ranking with plagues and financial woes of the 17th Century, or the depression of the 1930’s?
Often recessions take a year or longer to unfold, in 2020 this has happened in just weeks and parts of the housing market will be impacted. Some impacts like price and demand will be very blunt and quick changes, other changes like where we live, and the design of homes will take much longer.
Employment & Immigration
In the face of COVID-19 Governments acted almost over-night and switched-off big chunks of the economy. Followed quickly by huge shut-downs across entire industries and as a result the impact on employment has been blinding, huge numbers of people have either been stood-down or lost their jobs over-night, recovery may well take years.
The health of the housing market has always been interwoven with the health of the employment market, that applies as much to housing affordability for buyers as it does to anyone looking to rent.
The potential high-levels of long-term unemployment will have an impact on the demand for housing, and the trend might be even more blunt if prices and demand fall as immigration falls.
Beyond the housing market, immigration accounts for a big part of our population growth, and that is a key driver of economic activity.
In any respect the market may see a huge drop in confidence, and many buyers will turn away from the risk of taking on a mortgage.
These few comments are among the most urgent aspects of how markets will be impacted as we start to emerge Post COVID-19, and there are many others that I’ll address over coming weeks.
Home is where the Heart Is
But I suggest that one fact already stands out and that is that home is sure to take on more relevance for every individual and community and that’s either a home that’s being purchased or rented.
Home is going to become far more central and will and already does address working from home, home schooling, home shopping, home renovation, home baking, home cooking, home cinemas and better inter-generational housing, as the aged care sector has been very starkly battered by COVID-19.
As we start to consider the housing market post COVID-19, home is going to be central in so many ways to our personal recovery, society and community as a whole, and the economy.