The impact of work-from-home on housing

• Online property search keywords indicate trend for work-from-home (WFH)
• Employees continue to demand more flexibility for remote work. Managers have had to acquiesce.
• Not all occupations have the flexibility but 3-4 times more people may WFH than before COVID.

This month, Realestate.com.au published an article on the 10 most searched keywords for houses and their year-on-year growth. “Study” came out on top to clearly illustrate the pandemic’s impact and the need to be able to work-from-home (WFH) effectively.

But WFH implies more than just a simple room to work in.

Parents especially need buffers between working and living spaces. A glance at the rest of the list shows a clear trend towards larger spaces overall with “outdoor area”, “pool”, “shed” and “garage” all appearing significantly. “Air conditioning” is becoming a must-have with more time spent at home in the heat of the day.

It would appear that many home buyers are betting on WFH becoming a larger fixture in the working lives. Have there been other drivers of this trend apart from the obvious current crisis?

A new attitude in the workplace?

Kate Lister, President of Global Workplace Analytics – in her article “Work-At-Home After Covid-19—Our Forecast” – talks about a number of changes in attitudes that suggest a new future for the workplace.

The first is the increased demand for flexibility which has been building for decades. Lister explains that surveys were regularly showing 80% of employees wanting some level of flexibility to work from home even before the pandemic. Employees are asking the question ‘why they should be tied to their offices?‘ when technology affords them the ability to be productive at a distance.

The second is the reduced fear from managers and executives about WFH.

A primary barrier to WFH has been the lack of trust from leaders. Would their employees do the work if they were out of sight? Now that so many managers have had to work from home themselves, those that used to measure productivity by counting bums-on-seats have had to shift their focus to measuring results. Leadership coaches are surely rejoicing now that micromanagement and “hovering” are being curtailed.

Furthermore, there is new pressure from boards and shareholders to ensure future disaster preparedness. Leaders will have to demonstrate to their boards and shareholders that they can switch seamlessly between the office and remote work.

A financial case to make for both employers and employees

Lister also notes the huge potential for cost savings for both employers and employees. She points out that many employees spend only about half the time at their desks.

“Employees around the globe are not at their desk 50% to 60% of the time. That’s a huge waste of space and money”.

A typical employer can save about US$11,000 per year for every person that works remotely about 50%. Such employees themselves save between US$2,500 and US$4,000 per year and those that work remotely full-time can save even more.

Knowledge-workers to benefit most in the future

McKinsey & Co released a report ‘The Future of Remote Work’ in November, and found that hybrid models of remote work are likely to persist in the wake of the pandemic. But, this would be mostly for a highly educated, well-paid minority of the workforce.

The study found finance, management, professional services, and information sectors would have the highest potential to accommodate WFH. No such luck for agriculture, construction, transportation, mining and retail amongst others. These more physical occupations have much less opportunity for remote work.

Even so, McKinsey posits that more than one in five could work remotely three to five days a week. And they could do so as effectively as if working from an office.

A permanent impact on housing preferences?

There will be three to four times as many people working from home according to McKinsey & Co if WFH is embraced at these levels. This will create a profound impact on urban economies, transportation and consumer spending. The flow-on effect to housing preferences will also be substantial. The key features being searched for should continue to reflect this.

~~

References:
(1). Neil M., “Post-COVID living: How WFH has changed what buyers want in a home”, 20-Jan-2021, realestate.com.au.
(2) Lister, K., (2020), “Work-At-Home After Covid-19—Our Forecast”, Global Workplace Analytics.
(3) Lund et al., “What’s next for remote work: An analysis of 2,000 tasks, 800 jobs and nine countries”, 23-Nov-20, McKinsey & Co.