Business World

Covid-19 pandemic has greatly impacted real estate industry worldwide

The effect of the coronavirus pandemic lockdown has greatly impacted the real estate sector across the globe.

Investment volumes have seen huge drops, developers aren’t able to get permits and construction work has been delayed due to the unprecedented shutdowns. On top of this there is also a lot of uncertainty amongst companies when it comes to receiving payments for mortgages from their customers.


Purchases from malls and physical retail stores were facing a decline even before the pandemic stuck. People moved to e-commerce shopping and the pandemic has only positively impacted this process.

During the first few months of 2020, the commercial real estate segment witnessed a sharp dip of 29% in investment volumes, worth $321 billion.

The United States witnessed the highest drop of investments, about 37%, followed by Asia Pacific region 32% and EMEA region 13%.

The Covid-19 pandemic made office spaces more of a liability than an asset. They were burning unnecessary cash on rents and maintenance as workers were asked to work from home forcing organizations to either consolidate or forgo office spaces all together. This action has led to a sharp decline in commercial real estate demand.

According to CNN, Dell saves about $12 million every year by offering 25% of its workforce a choice of flexible working conditions and integrating extra office spaces.

Co-working spaces or shared workspaces have become popular recently. There has been a spike in demand because of their lower costs and convenience.


The pandemic caused many people to work from home.┬áMany relocated to areas which are less expensive since they couldn’t afford a mortgage anymore or because they wanted bigger spaces where they can live and work comfortably.

This shift has led to a spike in demand in the suburban and rural areas.

Truckee, California experienced a surge in average selling price by 47% in the housing sector due to rise in demand and less supply. Similar surges were even witnessed across urban areas as well.

The economic impact of the pandemic on real estate in the long run is still uncertain but it has changed the structure of this segment. There has been a shift in the needs and priorities of organizations and individuals.