Real estate markets are starting to stir from their Covid-induced slumber. After months of plummeting listings and frozen transactions, new deals are finally being made and prices have begun to recover.

But the extent to which real estate will share the longer-term pain of a global economic downturn is still unclear, with some predicting that a momentary rebound will vanish when the effect of government stimulus packages wears off and housing loans become inaccessible. Beyond the depth of the crisis, there are also signs of lasting changes brought on by the pandemic, from telework-adapted homes and urban flight to a whole new calculus for office space and retail.

Here is a quick tour of the real estate landscape in the rubble of COVID-19"s first wave:

Flexible Homes City living is often about making a choice between features, including outdoor and indoor floor plans. But the lockdowns have shown the value in having a home that can do it all.

• In Madrid, houses with a terrace, garden and spacious common areas are suddenly in high demand as real estate transactions resume. After three months of confinement, Madrileños are searching for "multipurpose" homes which are adapted to teleworking,La Razonreports.

• Design and construction agencies have been forced to quickly adapt to this new trend, with one major real estate developer reporting that 25% of client demands now revolve around adapting living spaces to a potential future crisis.

• These new trends have led to speculations that prices for second-hand homes could drop while new buildings could become more expensive.

Urban Flight The first trend that appeared on the real estate market after lockdowns were imposed was a rush to rural, as people decided where to spend their confinement months.

• In France, a market analysis by Notaires de France shows that 17% of urban dwellers relocated to their country homes once the pandemic arrived.

• Rural living offers bigger homes with green open spaces, and real estate agencies speculate that this trend could translate into a spike in prices on countryside property that extends even after the pandemic.

• Still, French analysts are skeptical to a full recovery of the market as a whole in 2020, especially as national real estate saw record investment volumes in 2019.

A real estate agency in Barcelona — Photo: Paco Freire/SOPA Images/ZUMA

Retail Recession The retail sector has felt the full force of the pandemic. COVID-19 lockdowns came at a time when online shopping was already posing an existential threat to brick-and-mortar stores around the world.

• In the UK, market intelligence firm S&P Global describes the retail sector as being on "life support" after months of little or no income. This is especially true on high streets with jacked-up rents.

• Most indicators point to the dynamic continuing, and the sector now faces an ominous combination of a prolonged squeeze on consumer spending coupled with a further acceleration of e-commerce.

• Naturally, the service-oriented establishments that simply cannot move online — like cafes and hairdressers — have taken a serious hit throughout the pandemic. Yet, with much better chances of recovery, they will be an important stabilizer for real estate prices and rents.
  

Office Boom Or Bust The shift towards telecommuting was well underway before the pandemic hit, with studies showing that the average global worker is at her desk only 40% of the time. It is widely believed that the impacts of COVID-19 will drive more people towards working from home, which means office space will lose value.

• Office real estate is a historically resilient market segment, partly due to the large share of prime office space in core downtown areas in major cities, where location brings important benefits like networking. There is also the long-term nature of office leases which mitigate downside risk amid recessions.

• Traditionally stable markets have so far retained low vacancy rates, like Tokyo at a stable 2%, or Melbourne and Sydney with a vacancy rate of 3.4% and 5.6%, respectively.

• Two other factors to consider: first, offices are evolving with our needs, becoming more efficient and smarter spaces and may not become outdated; secondly, some believe that this period of imposed teleworking will rather drive us back to the office, as stated in a recent report from the Kenan Institute: "Everything we've learned in the last 20 or 30 years has suggested that increased use of technology actually raises the value of face-to-face interactions."