A CBD rebound, office adaptation and investment performance are at the forefront of real estate concerns as the industry moves into 2021.
In residential real estate what looked like a horror 2020 shifted course with home values finishing the year at 2 per cent higher in capital cities combined and up 6.9 per cent in region areas according to Corelogic.
The office sector was plagued with lockdowns and work-from-home arrangements impacting occupancy rates while hotel occupancy also suffered with border closures.
Meanwhile the industrial market steamed ahead with an increase in logistics demand which hit a 10-year-high as retail stores closed and infrastructure pipelines ramped up.
Following the pandemic and huge changes across the market Knight Frank has listed it’s top 10 predictions for real estate in 2021.
|Urbanisation on hold, but cities will reassert their strength
|Governments ‘thinking big’ on next wave of transport and social infrastructure projects
|Offices will adapt to remain key to collaboration, training and cultural cohesion
|The landlord-tenant relationship will adjust
|Shifting pattern of prime residential demand to continue
|Short supply of prestige residential rentals
|Investment performance will be relatively strong compared with previous downturns
|Premium on income security as investors look to re-weight and adapt their portfolios toward industrial and specialist sectors
|Overseas investors to drive the office market in 2021
|Lower return environment will drive appetite for debt strategies and boost competition in non-bank lending
Source: Knight Frank
Knight Frank chief economist Ben Burston said cities will remain the engine rooms of the national economy however regional areas will grow.
“They have sufficient scale and critical mass of service sector jobs to continue to develop rapidly, while also benefiting from a tilt in lifestyle choices due to the pandemic that will see some people opting for a less CBD-centric working life.’
Burston added hybrid work arrangements will transform offices into central places for collaboration, culture and connection while tenants seek more flexibility.
Knight Frank head of residential research Michelle Ciesielski said lockdowns and closed state and international borders have given people time to reflect on their lifestyles.
‘As a consequence, more and more people are seeking detached family homes.’
‘Large gardens and outdoor space are now more of a priority, with the lockdown period emphasising the connection between wellbeing and the great outdoors.’
Source: Top 10 Property Market Predictions for 2021, by Renee McKeown, The Urban Developer