PETALING JAYA (Sept 24): The Covid-19 pandemic could impact near-term supply and long-term design of housing around the world, according to a research by Knight Frank.
The research, titled Global Development Report 2020, involved 160 global developers across 22 nations. It noted that almost six in 10 global developers had delayed projects in response to the spread of the pandemic — as it broke down supply chains and prompted a wholesale rethink of how and where people want to live.
“Of those with delayed projects, more than four in 10 are now making changes to designs that were once considered complete,” it stated.
Knight Frank associate Flora Harley said that while it is still too early to confirm the lasting impact of the pandemic on the development landscape, it is clear that the pandemic had accelerated pre-existing trends and prompted new ideas for current and future developments.
While developers will likely temper their urge to radically reshape development designs initially, the survey showed that there is a desire to consider potential Covid-19-inspired changes.
These changes include space for home offices for flexible working from home, healthier and greener living with facilities for bicycles, developing in the cities, mixed-use schemes, fulfilling requirements of the domestic market as well as virtual viewings.
“According to our survey respondents, funding is the biggest barrier to global development, with just under a third citing it as their biggest concern. Some markets have seen a reduced number of lending facilities offered to developers,” she said.
“At the moment, there is decreased bank appetite for lending to developers, and in some markets the pre-sales requirements make it hard to begin construction. One way for governments to spur construction would be to facilitate lending, perhaps through a combination of guarantees or loans. This would crucially remove one of the biggest hurdles in development and enable ground to be broken.”
The next biggest barrier is the threat of further property market taxation and regulation, with planning and travel restrictions also seen but to a lesser extent, as barriers to overcome in the near term.
Nevertheless, the level of market activity seen through the crisis globally and in London demonstrates the resilience of demand for housing designed and built prior to the pandemic. According to Knight Frank data, the number of offers accepted across the UK capital in August was the highest-ever monthly total on record.
Knight Frank Malaysia associate director for international residential project marketing Dominic Heaton-Watson noted that the August figure was supported by high transaction levels in the Malaysian international residential department.
He added that the Covid-19 pandemic had accelerated trends under way in new build projects. Also, flexibility for purchasers is important as they are seeking truly versatile living space that supports agile working, while allowing for separation of home life to promote health and well-being.
“Some 44% of August transactions from the Malaysian (Knight Frank) office were in the two-bedroom category, with buyers seeking the additional space of a flexible second bedroom that could be used as a separate study room,” he said.