Inflationary housing prices are all over the news lately. In Singapore, it's increasingly common to see public housing flats tagged with an asking price closer to seven figures than to 'affordable'. In Australia, housing prices exploded nearly 20 percent this year alone, and the Reserve Bank called the uncontrolled inflation a risk to the financial system.
These trends can't be blamed on the pandemic alone; housing prices in multiple countries have been steadily inflating and outstripping income growth for years. But the pandemic appears to have worsened the situation.
Last year, enforced WFH sent up demand for homes as people realised their current living situations weren't conducive to their work. During that first wave of lockdowns, People Matters heard from business leaders whose team members were driven to take calls in toilets and closets because there was no other quiet environment in the house. People leaders fretted, quite accurately, about whether employees could be comfortable or productive with the additional stress of high-density living and unsuitable workspaces, especially in Asia where it's common to find several generations and even extended family sharing homes.
Simultaneously, broken supply chains and massive manpower shortages in the construction sector meant that new homes were being built much more slowly than before. Sellers and renters could demand exorbitant prices, and often get what they wanted – even though buyers and tenants might be taking pay cuts as businesses struggled.
Now, with the hybrid working model under serious consideration in many parts of the world, these pressures aren't noticeably easing. Neither are home prices. If anything, housing prices are still going up. This potentially leaves a large number of employees in a bind. Even though hybrid working has been predicted to be far less common in the Asia Pacific than in the rest of the world, enough people are still going to remain on the hybrid model to create a real need for more housing.
In today's situation, some employees are fortunate enough to have settled into a living situation that works with the hybrid model. But far too many others are frequently left with an unpleasant choice: continue struggling with a home environment that doesn't meet their work needs, set aside large portions of their income to rent a new living space, or take on significant amounts of debt to finance a more suitable home - the second two impacting their own financial well-being in the process.
Meanwhile, is this any of their employers' business? In certain ways, it is, simply because employees' ability to do their work may be affected. Employers have a responsibility to provide a reasonable working environment - hence why, during the first wave of lockdowns, we saw companies going the full mile to help employees get a decent WFH setup in place, from getting their computers couriered to their homes, to providing allowances to deal with setup expenses.
On the other hand, today's property market is inflated to a point where it's safe to say it's unreasonable to ask employers to assist with this particular need.
One option that might overall please more people, especially the more conservative-minded employers, is simply to have more employees return to the office full-time: flexibility in the other direction. This is a solution that goes backwards, so to speak; it's a step away from what the last year and a half's experiences have already shown to benefit employees, and it's also a step away from what assorted surveys and studies have shown employees want.
Eventually, however, the trend may swing in this direction, especially as more younger employees enter the workforce at the same time as they are priced out of the housing market. For this demographic, the benefits of flexibility will inevitably clash with the downsides of an unsuitable WFH environment, and may well be outweighed. And when this happens, it will be an admission that hybrid work and the current state of the housing market just don't go together.