COVID-19: Global Real Estate Implications

Updated: May 22, 2020

By Jill Research & Strategy

Multifamily is considered to be the most resilient sector and this is being supported, at least in the short-term, by various income-protection schemes; but this will be challenged should growing unemployment begin to soften rental demand. The widespread use of income protection schemes will mitigate against the worst of these impacts provided they remain relatively short in duration. The investment risks are weighted toward lower-income rental properties; more vulnerable households are more likely to require government income support and, as a result, household financial circumstances will correlate with the strength of national policy measures. 3 factors which will determine the severity of the economic downturn in each country:

  1. The extent of the isolation and social distancing measures

  2. The duration for which they are in place

  3. The fiscal and monetary policy response

The federal government issued a 120-day moratorium on evictions from federally subsidized housing or from a property with a federally backed mortgage loan.

Regardless of fluctuations in sentiment and activity, the overall trend has been for higher allocations to real estate, and according to JLL, there is no reason for this trend to reverse over the medium to long term given the advantages of real estate investments. Over the long term, real estate remains an attractive asset class. Real estate continues to offer good risk-adjusted returns that are less correlated to other asset classes Overall, the way we live, and work is changing, and some of the emerging new trends will become part of the ‘new normal’. New trends are already starting to take shape as governments, businesses, and communities begin to adjust to the post-pandemic environment. But equally, there will be other consequences to the pandemic that will surprise us and that are not yet possible to predict.


Best Regards, Pedram Abraham Mehrian Chairman & President Strategic Legacy Investment Group, Inc. & Its Subsidiaries

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