The full consequences of the Covid-19 pandemic on the real estate industry will take time to be revealed, however it is already clear that the crisis has imposed new trends, sped up innovations and quickly changed buyers’ needs. In the luxury real estate industry it is already possible to observe a change amongst professionals and buyers from all over the world, and we have identified three trends that will likely characterize the industry in the coming months.
Far from the city
Large metropolitan cities will always be the most attractive markets for the high-end property investors. But after the first months of the Covid-19 pandemic many of them shifted their focus away from the biggest cities, such as London or New York. Property searches in the metropolitan areas registered a 20% drop while the research focused on areas around the urban centers grew 180%. Social distancing and the lockdown changed buyers’ requirements and desires: with people hunting for houses in safe areas, with bigger private outdoor areas to enjoy while staying home. Therefore, mountains, coastal areas and the countryside have been drawing increasing attention from buyers. Alsace in France, Maryland and South-Florida in the US, Algarve in Portugal and the West side of Australia are some of the regions that registered an increase of buyer interest.
Restrictions on travel and social distancing have accelerated the digitization processes of many industries, including real estate. Since processes have been moved online, deals have become easier and properties have been sold faster than ever before. Now real estate agents and potential buyers communicate remotely: for example, in the US even notaries are working online and in Australia, a new auctions system has been introduced. The future belongs to the Proptech industry, and this will continue beyond the pandemic as everyone becomes accustomed to the speed and agility that only technology can offer.
Estates can be visited remotely thanks to the virtual tours
High-end buyers often search for properties at a distance from their usual residence, requiring extensive travel to visit any estate of interest. This has proved difficult to maintain due to the recent restrictions, and therefore technology has enabled businesses to continue that would otherwise have halted. A recent piece of research found that 1 buyer out of 5 presents an offer after viewing a virtual tour of the property online, even if they have never seen it in person. One of the leading companies in this industry is Matterport, which is offering special discounts to all Luxury Estates agencies that publish their listings on this platform (click here if you want to know more about it). According to a recent analysis, listings that provide a virtual tour generate 95% more requests from buyers and spend 31% less time on the market.