Housing projects are being put on hold as developers consider the changes necessary following the corona virus epidemic.
A Knight Frank survey revealed that about 60% of a sample of 160 global developers in 22 countries have delayed projects as a response to the epidemic.
The firm said supply chain breaks and “a wholesale rethink of how and where people want to live” explain the delays. About 40% of developers with delayed projects are now making changes to designs once considered complete.
Design changes that might be prompted by the epidemic include provision of space for home offices with advanced telecommunications to enable flexible home working.
About 38% of developers said they are more likely to consider providing facilities for bicycles, against 17% that are more likely to consider parking space availability. About 41% of respondents said they want to develop in a mix of urban and rural locations, 45% were more likely to focus solely on cities.
However, it is too early to make conclusions about the lasting impact of the pandemic on the development landscape, according to Knight Frank associate Flora Harley. “It is clear that it has accelerated pre-existing trends and prompted new ideas for current and future developments,” she added.
Refrain from overeaction says KF
Harley warned that the research also reveals the importance of not overreacting to the immediate fallout from the crisis. “There is little evidence pointing to the need to design for future lockdowns or specified meterage for social distancing.”
Demand has remained resilient with market activity throughout the crisis globally, and specifically in London she pointed out. According to Knight Frank the number of offers accepted across the UK capital in August was the highest ever monthly total on record.
Funding is the biggest barrier to global development and some markets have seen a reduced number of lending facilities offered to developers.
“At the moment there is decreased bank appetite for developer lending 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,” said Harley.