How has the working-from-home era changed the property market?

The pandemic saw few silver linings, but working from home was a major perk. Many Aussies swapped their office passes for a TV remote; it was the start of a new way of living across the world.   

If we take a look at the wider consequences of the pandemic, 2020’s working from home changes impacted many industries, with one of the most notable being the property and real estate industry. Namely, we saw the market value of homes rising exponentially.  

Aussies became more concerned about their work from home set-up, demanding spaces that allowed them to work safely and effectively from inside their own four walls.

Post-covid, while some businesses are calling employees back to the office, working from home remains an important part of Aussie working life for many – and the property market is still responding to new consumer demands.

With insights from Associate Professor Adrian Lee, from the Property and Real Estate Faculty of Business and Law/Deakin Business School, we’ve taken a deep dive into all things WFH and the property market.  

We’ll explore how the working from home change impacted buyers, and how sellers and real estate agents responded.

How common is working from home in Australia? 

Working from home has been an option for some workers in Australia long before 2020’s quarantine. According to the ABS, the 1970s saw approximately 15% of workers doing so from home. These numbers continued to rise in subsequent years, with around 25% to 30% working from home up until 2020’s lockdown.  

While this model was available to some, it wasn’t considered common, as only select jobs within a few industries were allowed to work from home.  

Then came 2020, where working from home changes were introduced, and quickly became the norm. March 2020 saw the Federal Government issue stay at home orders, and any job that could be performed at home would need to be performed at home.

Between 2020 – 2022, 46% of Aussie workers checked into their home offices for at least one week.

In the years since, the workforce has largely recalibrated, and industries have issued return to office orders for their staff.   

However, many employees have seen the benefits of working from home, including improved mental health, money, and work life balance. 

This shifting landscape has seen a myriad of companies and employees move into a hybrid format, which typically looks like a few days at home and a few days in office.  

As of 2024, 37% of Aussies continue to work from home.

How has market value of property changed over the past five years?

So, how have world events and our reactions to them impacted the value of property over the last half a decade?  

As we adjusted to spending 24 hours a day within our homes, we began to value them differently.  

 But why did the market value of property begin to shift?  

1. Interest Rates: The economy took a big hit during covid. This saw interest rates dropping significantly, allowing consumers to borrow for less.
2. Working from home: Many employees needed to invest in spaces that suited these working from home changes. This meant that home buyers and renters tended to favour homes with work from home setups. 

These reasons, among others, caused a meteoric rise in the value of homes in Australia, with home prices rising 39.9% since the start of COVID.

As Associate Professor Lee adds, ‘Working from home means households have preferred larger homes to accommodate a home office. They also tend to live further from the CBD where their office is, though with easy transport links to the CBD for when they do need to go in.’ 

Does a proper work-from-home set-up influence the value of property today? 

So, does a proper work from home set-up actually influence the value of a property?

While it’s hard to clearly define what impact working from home has had on the value of homes, there is some conjecture that working from home has influenced the property marked – and the price of homes – in a few ways:  

1. Demand for homes: Firstly, working from home changes have driven demand. People will continue to look for homes until one suits their work-from-home setup needs. Using simple demand and supply rules, this means that when more demand is apparent, costs can increase. 

2. Diverse Interests: Gone are the days of sellers bringing an untouched house to the market. Many homes now include spaces specifically designed for working from home, which increases the overall value of the house entering the market.  

3. Location: An important element rarely considered for a work-from-home setup is the adjacency to other spaces. People want areas to get away from the desk such as local cafes to work at for a change of scenery.

Associate Professor Lee suggests that larger homes in less dense areas (further away from the city or in regional areas) are becoming more popular. 

Lee notes, “Larger homes are valued more than pre-pandemic due to the flexibility of added space that may be converted into a home office.” 

Will working from home continue to change the property market? 

Associate Professor Lee tells us, ‘At the moment, it seems employers are demanding more of a return to the office, so the tide is flowing back to working from office.’ 

According to PWC, the future will see hybrid working as the norm, which means the property market will continue to respond to these changes.  

But, as Associate Professor Lee assures, ’there will be a time where we reach an equilibrium of working from home vs. working from office where there will be no further changes.’

He adds, ‘Currently, smaller inner-city homes are more affordable, which makes working from the office more attractive. Another factor is the kind of employment in the future that allows for work from home is likely to grow, working from home will remain quite common given strong. All this points to continued desirability for larger homes further away from the CBD.’ 

A final word on working from home changes and the property market  

It’s clear that the move to working from home has had a ripple effect on the property market and the value of homes. While the impact of work-from-home policies may have felt like a temporary trend to some Aussies, it’s clear that the changes in how we live and work have left a lasting impression.  

For the property market, the rise of remote work meant that larger homes began to rise in demand. People wanted different things when looking for homes. Even as offices reopen, the flexibility of hybrid work is here to stay, and with it, the need for homes that can accommodate both work and life.  

So, while many return to offices in greater numbers, the evolution of how and where we work has already altered the property market—and will continue to do so for the foreseeable future.