August 30, 2020
Date: 30 August 2020
Source: The Guardian Australia
Author: Elias Visontay
Photograph: Loren Elliott/Reuters
Office buildings in Australian CBDs could be converted into residential living spaces, as a tanking commercial property market leads to a potential reversal of gentrification.
The prediction of drastically different city centres, made by property experts and architects, follows the Covid-19 shift in work habits that have forced employers to allow staff to work from home, with expectations the flexibility afforded to them as a result of coronavirus will remain in some capacity into the post-pandemic future.
Urban planning thinktanks believe that as businesses require less floor space and less commercial property is used, state and local governments will have to do more to draw people into the city centres in which they have already invested heavily.
By April, 42% of office real estate requirements in Sydney were on hold, and in July, mobile phone data collected for Sydney’s CBD showed foot traffic was down 52% on January. The decline was 65% in Melbourne’s CBD before their stage four lockdowns were introduced.
It has been forecast that Covid-19 working from home patterns will deliver a $10bn blow to the $142bn Sydney’s CBD was expected to generate in 2020, including a $3bn drop in productivity from an estimated loss of interactions between skilled workers who meet unexpectedly and collaborate.
While movement and financial figures from Sydney and Melbourne include varying degrees of community transmission, the Guardian understands similar, not yet released figures show movement data in Perth’s CBD – in one of the states least affected by distancing requirements – in August is about 50% of pre-pandemic numbers.
Tony McGough, a senior property lecturer at RMIT, says the figures from Perth, as well as cities overseas that have eased Covid-19 restrictions, show working habits are not likely to return to five days a week in an office.
“Suddenly an awful lot of work can be done from home and, once you get that idea in their heads, it stays.”
He believes workers alternating between one day at the office and one day from home will be a mainstay of future work culture – a trend that could almost halve demand for office space.
“The risks in property are increasing massively, particularly for office and retail,” McGough says. “The fall in foot traffic is not just bad for offices, but for the coffee shop all the workers went to, and all those businesses.
“There will be a flight to quality, so the very best buildings will hold up, but this will mean chunks of office areas, they might start looking at rezoning some of those to residential.”