If you’re trying to figure out the mood of the real estate market after the summer holidays when business starts to gear up again in September 2020, this article is targeted at you, owners and investors who want to appraise the new scenarios and need to base your planning on the earliest signals coming to us from the market after the lockdown:
Just for a moment, let’s leave aside the many unknowns and examine the solid data we have available, category by category!
First of all, we notice that all the main real estate conference events scheduled for September and October are confirmed: I’m referring to Scenari Immobiliari in Santa Margherita Ligure starting September 12th, Paris Real Estate Week from September 14th, and Expo Real in Munich starting October 14th, which will be attended in person by all the main Italian and European players. This reveals the optimism of the sector, perceived by all the institutional operators and based on the fundamental solidity of the real estate market that, as 2020 got under way, gave everyone good reason to expect another record year after an excellent 2019, especially in certain sectors which have shown themselves in these last few months, to be particularly resilient.
These particularly successful sectors are residential property and logistics, and we could add another, apparently surprising sector: tourist accommodation, particularly of types other than hotels, characterized by spacious rooms and comfortable indoor and outdoor areas.
Office properties are experiencing a period of greater uncertainty, on the other hand, due to the recent decisions of a number of companies, such as the British company Schroders, to keep its 5000 employees working remotely even in the future. In addition, there are problems linked to the use of elevators and to working in open-space and co-working environments which, until now, had been quite fashionable. The duration and the obvious psychological effects of the pandemic have induced many companies to rethink their office requirements and the sector of office properties is therefore likely to experience slower demand due to the changes under way.
The retail sector, which was already reeling as a consequence of the increasing trend toward online shopping, was forced to a sudden halt and can now be viewed as the hardest hit of all sectors. The pandemic has accelerated the crisis which is not the same everywhere, however: we can imagine that the gradual recovery of tourism will restore shops in the downtown areas to satisfactory performance (the attractions of the city centers will always be a draw). The greatest uncertainty concerns shops in less central and outlying districts and we have already seen that shopping malls have not been doing well, and their demise seems inexorable.
But let’s focus on the most resilient sectors in which to invest now. The tourist sector has revealed how types of accommodation other than hotels are attracting more and more tourists: houses and apartments for rent, especially luxurious properties, which are in great demand in the country, at the seaside and in the art cities. Summer 2020 saw vast numbers of clients, both Italian and foreign, preferring apartments and luxurious houses as tourist rentals rather than the traditional hotels. The trend was already significant in past few years and in the summer of 2020 it gained powerful impetus. We can imagine that 2021, with the gradual return of American, Russian and Asian tourists, will further confirm this rapidly growing trend. Among the hotels, for the same reasons, the most successful will be those with spacious rooms and plenty of indoor and outdoor common areas. Many such structures have already implemented a strategy of reducing the number of rooms in favour of increasing the size and requalifying the décor and this will probably continue. All over the world, people have rediscovered the importance of the home and the spaces it offers its members for their various activities; for this reason, the attention to the residential sector is at its highest levels ever now in 2020, and most of the private investment will be in the home. Both first homes and second homes are now at the center of interest of all those who have decided to change and improve their quality of life, and several countries, by implementing eco-bonus initiatives, are encouraging this trend.
An epochal event like the Covid-19 pandemic changes many scenarios and perhaps also some of our mental paradigms, as a number of our certainties show cracks and we search for better balance. The home is more than ever one of the few certainties remaining, confirmed with renewed vigor in light of the many others we have lost, it becomes the “road to shelter”, remembering the poet Gozzano, because it is the place of the sharing of experiences and memories with those dearest to us, and now more than ever the home has become our safe refuge.