Work-from-Home Drives Real Estate Shifts: Major Inflation for In-Nature “Wellness Locations”
By Thierry Malleret, economist
Stay-at-home and hybrid working are here to stay. For those with a profession allowing them to do so, 2-3 days a week working from home is becoming the norm. The consequences of this radical shift will be manifold. Three shifts stand out: (1) Cities will continue to thrive, but high-end property prices in city-centers will correct by 10-20% as well-paid professionals migrate to more spacious homes in appealing locations from where they can commute twice a week. (2) Conversely, property prices in rural areas will increase, with the presence of remote workers contributing to the reduction of regional inequalities. (3) Productivity will increase as employees are happier and waste less time and energy traveling–current research supports this assertion.
The work-from-home phenomenon and its associated hybrid culture has triggered inflation in what you could call “wellness locations,” i.e., a big increase in real estate prices in places that make us feel well, like the mountains. This is obvious both in the European Alps and in the US mountainous regions, such as in Colorado. Premium properties in luxury ski resorts are the main beneficiary of this new trend, which now extends to cheaper locations.
What makes it singular (or different from the past) is that it’s being driven by national and local buyers who appear to be rather price-insensitive when looking for a holiday home, but wellness-sensitive when looking for a nice location.
Prices for holiday homes in places such as the Four Valleys (Switzerland), Kitzbühel (Austria), Chamonix and Courchevel (France), or Aspen (US) have reached record highs, rising for prime properties by an average of 10-20% year-over-year, and often associated with a wellness offering. The desire to move from the city to the mountains (or the seaside or countryside) will endure because it’s being driven by a fundamental wellness trend: the aspiration to lead a healthier and better life, and a rethinking of the balance between work and leisure (in this specific case rather a fusion of the two).