With COVID putting all sorts of new pressures on our people, cultures, systems and ways of living and working, we’re seeing a number of new trends coming to bear. We’re also seeing existing technology, housing and cultural trends accelerate. The changes, challenges and opportunities for the market as a whole serve as a backdrop and lagging indicator of how consumer sentiment and the shape of our expectations for the future of our homes evolve.
What is happening with the housing market?
As of May 2020 we are starting to see lockdowns lifted in various countries, housing markets like England opening up with high street agents being the first allowed to open up again, and other supporting services businesses like conveyancing, surveying, movers coming back to life to support the pent up demand in the housing market. It’s fascinating and surely to be hotly debated that the rest of the UK is not following the direction of England here opening up early. In Portugal with the lockdown lifted Monday last week, people are out and about in the streets, on the beaches and looking for homes gain.
In England, this is theoretically wonderful for the housing market – apparently 322,000 buyers on the side waiting to move – £82bn of property that hasn’t been bought during the crisis.
It’s going to be really interesting to see how that thing goes – house sales have been 10% of what they usually are – transaction volumes are basically like December, which is usually the slowest month. I’m super curious to see what happens with transaction volumes and negotiations – with demand coming back, will prices stabilise or take a hit like so many of us have been thinking or even hoping?
It also leads me to wonder whether Help to Buy and similar schemes around the world will be decimated or boom. In a market like London where all of the properties that apply to this scheme for the most part are apartments on leaseholds, will consumers want to still buy them in the face of the changes with COVID? Will the help on financing from the Government help stoke people’s interest in buying these often quite pricey new builds? Or will we see people retreat to the suburbs and even more rural areas and villages for safety, extra space and cheaper prices per square foot / per square meter?
Will the opening up of the market also hail a new age of adoption for property technology that help reduce friction and costs and increase efficiency, safety and quality? I can’t answer all these questions yet but would love to hear from any of you with views. What I can say however, is that what happens here for the housing market will be a huge determinant of what proptech actually survives vs thrives.
It’s great to keep on top of these macro housing market and tech trends, but what I believe is going to really shape these macro changes over the coming decade is the shift in consumer demand, changes in design thinking, and the new applications of technology to the home.
Here are the Top 10 Trends for the Home in the 2020s
- Demand shifting from apartments to houses
- Being healthy at home across body, mind, spirit becomes trend
- Third spaces like gyms, children’s playplaces, offices become key USPs
- Advanced communications and technology to keep in touch while being isolated
- Moving to multi-space layouts and bunkers vs open plan
- Self-sufficient homes that can survive off grid
- Improved health features like filtration and neutralisation
- WFH becomes a “need” not a “nice to have” as home becomes the new office
- Permaculture, urban farming and food production goes global
- Mass industry gets rejected in favour of local products and services
Demand shifting from apartments to houses
On a personal level, since the end of 2019 and early 2020 my wife and I have changed up our personal real estate strategy 100%. Initially we were focused on buying an apartment that we could fix up and rent out on short term rental to bring in additional income and provide us an urban pad to escape from London to Lisbon to. This was our “Trojan Horse” to help us make enough income to then eventually be able buy a more expensive place with more land that is in nature. With everything that’s happened through this crisis, we’ve changed out minds completely. My wife who is an interior designer Kristina asked me the question that shifted everything for us:
“Why are we delaying our dreams when we can have them right now?”
From that moment, we realised if we shifted our focus, and looked for properties that were outside the city, close to or in the forest, and a short drive away from the beach here in Portugal, that we will be able to not only find a great deal but also find the sort of home and property that allows us to live our best lives and do our best work. Beyond this, it will allow us to be safer and have a place of our own, off the busy bustling streets of a major city, to spend time in and retreat to whenever we need.
All the other existing and new trends that exist around housing are conspiring to make many more people come to similar realisations, even if their underlying preferences and inputs were slightly different from ours. I don’t believe or expect that urban living is going to stop altogether, but I can imagine that some of the speed of this growth will be slowed and potentially reversed.
With my own property technology company acasa, I used to make a big deal about the speed and scale of urbanisation, which at the time was completely true based on data:
Up until now, we’ve understood that as much as 70% of the world’s population will live in our cities by 2050. This data and trend has been leading to more and more large scale single multi-family residential developments, more urban density, and increasing prices per square foot and meter of city based properties. In order to support this growth of urban housing and living we’ve been increasing the capacity and efficiency of our transportation networks, supply chains for delivery, and retail and entertainment spaces for these burgeoning populations. What was spoken about and predicted by the few was largely rejected by the masses and the developers and capitalists that built for them: that this increase in urban density will create the perfect petri-dish for airborne and other illnesses to spread like wildfire and be transported to other mega-Metropolises.
Part of this about houses and not apartments is that your house becomes more than an escape from routine and urban chaos. Your house the offers a retreat from viruses and infections. Urbanisation could take a step back as we retreat to small villages and city suburbs.
It’s of course too early to tell, but I think this trend of people moving to cities so rapidly will, at the very least, significantly slow down. At the very most, it could potentially be completely reversed. As more and more people in the middle class and younger generations double down on our comfort with tele-communting, use of technology and working from home – we could see more humans than ever moving to more suburban and rural locations and demanding homes rather than apartments. This trend reversing to people owning houses could also see us potentially going back to living in more communal but spread out environments and in turn see the rise of the village as opposed to the city. What an amazing and almost primal change that would be.
It could conceivably be not only an incredible boon for humans to reconnect with themselves and their nearest families, but also to re-build local communities and actually know your neighbours. Perhaps most importantly at the most meta of levels would be that humans may reconnect with land and the earth and once again realise we are just a part of the global ecosystem rather than the masters of it. This rise of the house and the village could change everything. But that’s for another post and for another time.
Being healthy at home across body, mind, spirit becomes trend
People around the wold have been experiencing an awakening. You can see it through the rise of meditation apps like Calm and Headspace, the resurgence of gym memberships, the newly burgeoning “wellness” industry, the growth of “conscious tourism” including the use of plant medicine, and many other trends.
Humanity seems to be waking up to the idea that health is of paramount importance. Many Eastern Cultures have known this and acted in accordance like this since the dawn of time whereas Western Cultures have let capitalism, free markets, and economic growth take some of the focus away here. I would not argue the East is better than the West or vice versa, but it is incredible to look at the differences in each and try to see where the balance between the two can actually exist to create the best outcome.
Some of the best examples to study that take this focus on wellness and health to the highest level are the so called Blue Zones where people live often to 100 years old or older! Interestingly enough the majority of these places are actually located in Western Europe or North America which I find fascinating. These areas include Okinawa (Japan); Sardinia (Italy); Nicoya (Costa Rica); Icaria (Greece); Loma Linda (California, USA).
This new focus on wellness makes way for huge changes in demand in terms of working and living and ultimately impact what sort of homes the world wants to live in.
Third spaces like gyms, children’s playplaces, offices become key USPs
People are now looking for more out of their houses than just a place to be able get to their job quickly and get a half decent’s night’s rest. They want a place where they can relax, be entertained, stay in shape, work, and stretch their minds, bodies and spirit to the next level. This demands in some cases larger properties but in all cases a shift in the typical design thinking of much of the Western World.
Having breakout spaces was a key for the open office. But now, we’re demanding break out spaces in our homes. My wife and I are thinking about things like art and music studios, rock climbing walls, meditation rooms, and home gyms. We also know we will want to have children soon so an enclosed garden is a huge benefit for safety as well as natural education.
This is such a big topic it probably deserves a post of it’s own but I’d love to hear from you: what are your dream third spaces for your home?
Advanced communications and technology to keep in touch while being isolated
While people are increasingly keen to be able to retreat to their homes for safety, security and their own personal well being – they still want to be able connect and interact with the outside world. In fact, the demands here are only higher. Fibre broadband, satellite internet, advanced touch screen technology, additional computing power are just some of the things that the more modern household consumer will be demanding in order to live their newly rural existence.
In order to effectively entertain your household as well as work from home, the sophistication of your communications systems and underlying technology are going to go through the roof – pun intended.
Moving to multi-space layouts and bunkers vs open plan
In a fascinating article from Ukranian architect Sergey Makhno in Dezeen magazine, Sergey argues that bunkers will become better than open plan in terms of layouts for homes. Homes will need to be fortified to survive natural and man made disasters. By breaking open layouts to more individualistic rooms you can better avoid the spread of contagion. Interestingly someone like James Clear, author of Atomic Habits which I discussed in detail in this post, would argue that “space should be organised for specific activities” which also will feed this trend. Spaces will move away from open plan to compartmentalised living so you can manage germs and viruses, but also manage when you have other people over.
Having lived through this pandemic I think we can all admit that these films we’ve been watching for decades about the end of the world, no longer seem fantastical. This will change how we all think about our life and work, and for the most paranoid amongst us, may radically alter how we construct and protect our homes. There will be “Minus Floors” for a pantry for food and water.
It’s my personal perspective, but With COVID and the need to isolate and the spectre of something worse happening in the future, your home and space will need to provide safety and security, sustenance and the ability to survive off grid in a disaster.
Self-sufficient homes that can survive off grid
The world has already woken up to the power of renewable energy. Energy is often the next largest cost behind rent/mortgage payments in a home. The need for renewable3 energy and on site energy storage are going to continue to increase in terms of the demand from household consumers. Many of the world suffer from energy poverty, rolling blackouts and other critical power failures. As people move further away from centralised power systems and the grids of cities, there will be an increasing demand for decentralised power and heat and the technology that powers it.
Solar power, wind power, hydro power, geo thermal power will increase in demand and either be produced on site or by local communities. This will be a huge boon once scaled up economically but the impact on the climate will be the most exciting thing here for all of us and our species longevity. Multiple sources of power and heat will be demanded inside the home including features like a stove, fireplace, generator, solar panels, and whatever you can do to operate off the grid temporarily if you need to.
We’re lucky, at least in most of the Western World, to not have yet experienced massive water problems, shortages, contaminations, or biological attacks. Many people and organisations have been concerned about threats to our municipal water systems for a long time. Being able to produce, filter, and distribute fresh, clean water is another growing need as is the need for clean air and consistent and high speed internet.
Improved health features like filtration and neutralisation
People will want to be able to have clean, safe, healthy water and air in their homes. This will mean a new demand for water wells, water filtration and air filtration systems. Household water and air systems that can clean themselves will also become popular for the household consumer that continues to be concerned about their families well being.
The commercial building sector is talking about self-cleaning air, ridding themselves of contaminants and effectively becoming “self-sanitising.” This is spilling over into how consumers are thinking about how their homes can do the same. While this makes sense on many levels it can also have terrible knock-on effects, as if this goes too far it could seriously damage one’s immune system as pathogens and viruses actually help make our immune systems stronger. Finding balance here will be really difficult but hopefully the genius of our scientific and technological and medical communities will shine here.
WFH becomes a “need” not a “nice to have” as home becomes the new office
March saw a 300% increase in search volume for “Work from Home” on Google.
The world of real estate is churning out article after article about what this lockdown has done to our working practices, the concern that offices may stay empty or under-utilised for longer than we’ve ever seen, and that many people are actually enjoying working from home. We’ve seen companies like Facebook and Google announce that their entire work forces will be working from home until the end of 2020, while Twitter CEO Jack Dorsey has announced that staff can “work from home forever.”
Houses will no longer have a desk and a shoddy desk lamp crammed into a corner. Instead, they will have ergonomic chairs and desks, multiple-screens, the enhanced broadband speeds that will be available because of some of the points mentioned earlier, and will be in self-contained, separate spaces from the rest of the houses to allow for deep work and flow. Home will become the new office and the focus of the design and construction community will be to help people find ways to really invest and make working from home not just tolerable, but deeply productive.
While this will be a greatly demanded feature and the “new reality” for much of the world, look out for the conflict this could cause amongst couples especially in smaller properties. I know just amongst my network of entrepreneur friends and in my own relationship, there has been a lot of strife around who gets what room and what set-up. Although the smart amongst us know it’s best to just let your partner have the best set-up 😜
Permaculture, urban farming and food production goes global
There is going to be a renaissance around food production. This will lead to a systematic rethinking of land use that could be a big part of the solution to the environmental crisis. “Urban farming goes global” where we find ways for our land to produce for us – not just clean oxygen and fresh water but also food. Previously overlooked “hippies” with ideas around permaculture and urban farming will become sought after experts to help bring more and more life into our properties to help create the vital sustenance we need. This film on permaculture really blew my mind and showed me just how far many people have come: INHABIT: A Permaculture Perspective.
Indoor plants, living walls and productive vegetable gardens will no longer be the purview of utopian hippies and futuristic visions and instead make up one of the core demands of the urbanites becoming ruralistas.
Mass industry gets rejected in favour of local products and services
There will be a rejection of mass industry. People will focus more on their local community, local economy, and local supply chain. This is less about the home itself and more the surrounding environment and the changes to human culture that this move back toward a more rural life will lead to. As people have watched the sky clear over China during this crisis and the vibrations in the earth reduce so much that seismologists can study the earth, waves and geologic movements much better – people have seen and witnessed first hand the impact that humans, our settlements and our industry are having.
While many of us appreciate all the amazing advances that increase globalisation has offered us, we also recognise so much of its folly.
As homes and their design evolves, and our local systems become more advanced, and our move out of cities increases in pace we will all want to see a return to the local community being able to provide for the local community which will cover economic, environmental, social and cultural needs like I touched on in my article about The Need for New Housing Models and Doughnut Economics.
Conclusion
I believe that this seismic shift in consumer demand for what we want out of our homes could also become the greatest drivers of changes and solutions to our environmental, social and cultural problems. If harnessed and harvested to it’s truest potential, we will be able to help increase humanity’s ability to survive and thrive in a new world order where the balance between people, planet and profit will be in the greatest harmony we’ve seen in the past 100 years. I hope to be able to set a great example for this belief and would love to hear from any of you out there that agree or disagree.
Nick Katz 