Housing after the “crown”: how the pandemic changed the approach to housing And what the buyer pays attention to in the first place
A few years ago, stories about the fact that people around the world would find themselves imprisoned within four walls with virtually no opportunity not only to travel, but also to often leave the house, were nothing more than the plot of “apocalyptic” films. However, today it is already our reality, in which everyone has learned to live. A series of quarantines has changed every field of activity, the laws of survival in the business environment and the needs of consumers. The construction industry did not stand aside either. Pavel Somov, the founder of Ecobud Building Group, spoke especially for Mind about how market preferences have changed.
How did the quarantine affect the construction?
Offices. The office real estate segment was the first to feel the changes. The reason is that almost all offices of large companies and shopping centers are being built not only with their own capital, but also with borrowed funds. Then rent is compensated from this cash flow – and a net profit is obtained.
But if there is no rent, there is no money either, which does not exclude the fact that you have to pay the loan and return the investment. Banks and financial institutions very rarely go to optimize interest rates, including during quarantine. The maximum is a small benefit that does not affect anything globally.
The state also did not provide much support, as it was done in other countries. Consequently, many businesses that were unable to “lease out” the lease of their offices tried to reorganize themselves to online work as much as possible, and those who did not consciously incur heavy losses or completely curtailed their activities. As a result, both tenants and landlords suffered.
It would seem that the situation is sad, and the one who is stronger survives. Everything went to the fact that commercial real estate would suffer the greatest losses. But even in such a situation, many found a way out: large players began to buy at low prices the assets of those who could not “survive” in the current conditions, hoping that this property will soon rise in value again.
Urban housing. In terms of urban real estate, multifunctional residential complexes with a full life cycle – not just a free-standing concrete “box”, but a kind of “city within a city” have become especially popular. Even outside the realities of quarantine in such a complex, a person can live and work comfortably, practically without leaving his usual territory. Nearby there is everything you need – office blocks, shops, cafes, pharmacies, gyms, beauty salons, etc. As a result, there is no need to ride from one end of the city to another every day.
At the same time, precisely because of the restrictions on movement within the country and abroad, the closure of suburban recreation complexes, the demand for suburban real estate, including cottage townships, has increased even more.
Country housing. Many began to realize that a country house is no longer a luxury, but an optimal solution for a comfortable life. At the same time, the choice is increasingly reduced not to a detached house on a random plot or in a village, but to a cottage town. No matter how much a person wants to create his own “fortress”, everything, one way or another, he gravitates towards an organized infrastructure, but without high fences and complete isolation.
But the most important thing is the neighbors, the style and culture of life around. If the tenants in the neighboring plot throw parties every day, you can forget about the comfort. This rarely happens with cottage townships, since sometimes even the “selection” of tenants is done quite carefully. For some developers, it doesn’t matter to whom to sell – the main thing is to buy it as quickly as possible. But there are those for whom it is important not only to populate the cottage town, but also to maintain its inner atmosphere.
As for the emerging demand, the last two years and several waves of quarantine have shown that cottage townships are more relevant today than ever. There is a simple explanation for this.
First, epidemiological security. The lower the concentration of unfamiliar people around, the greater the security. Even social status and connections are powerless in the face of the virus. The second point is the ability to spend time outdoors without being tied to public parks and other common areas with a large crowd of people. And for families with children – this is in the first place.
One of the main arguments against cottage townships is the high cost of such housing. But the reality is already that a country house with an area of about 300 sq. m is approximately equal to the cost of an apartment of 150 “squares” in the new Kiev business class residential complex. This, in turn, pushed the demand for houses in cottage townships, increasing it almost threefold over the past year and a half.
If we talk about suburban real estate in general, then literally in two years the demand for it has grown in total at least five times. This prompts many investors to reorient their investments in land outside the city, which in the long term can turn into a really good and profitable project. Which is natural: if two large suburban cottage townships are formed, the necessary commercial infrastructure will develop near them one way or another. As soon as effective demand arises, soon there is a supply of goods and services that will be in demand.
How should the construction business respond to the changed request?
End-user inquiries reflect the pandemic’s challenges, exacerbated by multiple quarantines. Namely, the “logistics” of the population has changed: citizens are wary of crowded places, long routes with several transfers within the city, and cramped locations.
In this regard, multifunctional residential complexes with the ability to receive maximum services without leaving the territory of an apartment, yard or residential complex will be more and more in demand. The demand for mini-logistics centers to serve the population in the cities themselves will increase.
As for the construction sector itself, more attention should be paid to the organization of accommodation, the “delivery” of workers and builders to the facilities, and to form construction processes at the facilities themselves, taking into account all the requirements of possible quarantine measures and epidemiological safety in general.