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Covid-19 Shifts Housing Demand Outward

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Housing demand will shift from city centres and workers will be prepared to commute further post-Covid-19, according to new research from Victoria University.

If working from home a few days a week becomes the new norm, residential areas are expected grow by 3.6 per cent, while businesses stay put.

However, research also shows that providing infrastructure for typical greenfield housing development could be a concern for the government, as well as the degradation of ecosystems.

The modelling also identifies that about 30 per cent of Australian jobs in managerial, professional and clerical occupation groups have a high work-from-home potential.

This would all lead to population shifts for Sydney, Brisbane and Melbourne—out of inner suburbs and middle suburbs and into outer suburban areas and towns.

Working from home, residential growth changes

Location Biggest population drop ( -16.2% or greater)Biggest population increase (more than 16.2%)
SydneyGlebe, Strathfield, inner cityPenrith, Blue Mountains, Central Coast, Southern Highlands
MelbourneCarlton, Glen Iris, inner suburbsWerribee, Melton
BrisbaneNew Farm, inner suburbsSamford Valley, Greenbank

^ Source: Victoria University, James Lennox

A similar pattern on a smaller scale is also replicated for Newcastle, Wollongong, Geelong and the Gold Coast.

Victoria University senior research fellow James Lennox said working from home a few days a week could very well become the norm in many occupations.

“Our modelling indicates people in WFH occupations will be more likely to live further from city centres if their weekly commuting costs are lower,” Lennox said.

“The net effect is to shift housing demand outward.”

This will have the effect of boosting growth and jobs of Sydney, Melbourne, Brisbane, and Canberra, but depressing that of other cities, towns and rural areas, the senior research fellow added.

“With there already being significant economic disparities between city and rural areas, and between different regions, these new trends pose a further challenge for policy-makers,” Lennox said.

“Costs like these could outweigh the benefits of working from home unless governments can deliver more sustainable forms of urban growth.”

During the first wave of Covid-19 in Australia nearly half of all employees worked from home, according to the Australian Bureau of Statistics.

A similar result was seen on a global scale, pushing residential developers to re-think the value of home offices.

Despite the threat of a drop in CBD office occupancy, major landlord Dexus recorded positive results for the first half of the year, while others have looked to update existing spaces in response to the pandemic.

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Article originally posted at: https://theurbandeveloper.com/articles/covid-shifts-housing-demand-outward