80% of bosses say they regret earlier return-to-office plans: ‘A lot of executives have egg on their faces’::As some business leaders accept hybrid work as a permanent reality, others are backtracking on earlier pledges to let employees work from home.
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I suspect they were ‘advised’ by the Banks and perhaps the government, to put the brakes on.
Every Corporation would be delighted to dump expensive city real estate, and “externalise facilities costs” to the workforce. ( which is what working from home is, from a balance sheet point of view). It’s what they teach at business school.
However, it would only take a handful of big players to to do this in succession to collapse the real estate market in most cities.
The knock on effect would likely include some large defaults by landlords and developers and who knows where that ends.
A secondary effect is house prices. certainly in London, where people pay a 2-5x premium to live within an hour of they high paying job.
If people no longer need to live near the office, why would they spend so much on crappy housing ? It would likely trigger an exodus away from the capital, collapsing the housing market.
In the UK if the housing market collapses, the economy follows it down the tube in massive way.
Hence the half hearted ‘push’ to get people back in the office .
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I bought my current house, 5 years ago, in a MA town a little closer to Providence than Boston (but still rather convenient for both cities).
My real estate agent called me yesterday out of the blue to see if we were considering any moves. We’re not, because we refi’d a couple years ago at a great rate, and even moving into a similar value house now would mean a significant increase in our mortgage.
I’m sure she’s heard that same story a lot of times. Nobody wants to sell because they then have to buy, and we’ve all got great rates from a couple years ago.