With the effects of the COVID-19 pandemic are felt all over the world, even the real estate industry is being impacted in many different ways. 

Real estate executives are now more worried about preserving value and liquidity, keeping tenants and visitors safe, and making sure everyone complies with government regulations. Additionally, tenants may have to deal with liquidity pressures that end with deferred or ceased contractual lease payments. In other words, in the short-term human and economic impact is clear as people stay home, offices and shops close and production is put off.

In the long term, the office and industrial real estate sub-sectors could be impacted by changes in where people work and adjustments in the supply chain. Transaction volumes are likely to decrease, but should be able to pick up and recover in later developments.

In the real estate industry, we can see that the pandemic has already accelerated some trends whereas other trends may reverse, and these trends have varied implications for real estate demand. For instance, the demand for online shopping has significantly increased and will likely continue, while the trend to compress work and living space is now under review. 

Countries all over the world have carried out changes to real estate policy to help lessen the burden on tenants and in some cases landlords: 

• In the United States, at least 34 states have temporarily disallowed evictions. Simultaneously, the federal government issued a 120-day delay on evictions from federally subsidized housing or from the property with e federally supported mortgage loan. Some U.S. states have stopped construction on all projects unless essential, like medical facilities.

• In several European countries, including the United Kingdom, Germany and France have deferred evictions. Some are even offering temporary mortgage relief. Commercial and residential tenants have been provided mortgage and rent holidays. Construction projects are likewise suspended. Banks are encouraged to give maximum tolerance and not to foreclose on late payments, while governments have appropriated retailers tax relief.

• In Asia, including the Philippines, landlords have offered temporary rental rebates and rent discounts.

Over the years, investment into real estate has fluctuated through many kinds of downturns but the overall trend has been for higher allocations to real estate, and we can pretty much expect the same in the future. Real estate continues to offer flexible risk and returns. 

Even though the COVID-19 pandemic is primary a human concern, there are secondary effects that are sifting through the economy and real estate industry that is here to stay. The manner in which we are all living and working today differs significantly from time last year. These are changes that will likely become part of our “new normal” following the lifting of the lockdowns that remain to be seen.