The outlook for housing in a post-COVID world

Even after the immediate threat of COVID has receded, we expect as many as 50% of office-based employees will work from home at least once a week. But the move away from cities and toward the suburbs should prove short-lived. Most of those leaving cities will have brought forward a planned move, and changes in relative prices will rebalance demand. With more time spent at home, we expect a rise in overall housing demand. However, given income constraints, the impact on house prices in the long run will be modest. In the US, increased demand for larger apartments, coupled with a rise in supply from empty office buildings, implies rents and capital values will see small falls from 2025 to 2029.