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The long term impact of Covid-19

Covid-19 has adversely affected business
The Corona virus

The long term impact of Covid-19

The Covid-19 virus has had a dramatic impact on national economies. It has forced many business to close and completely changed the way others can operate. It has turned once busy centres into ghost towns; brought international travel to an almost complete standstill and has caused stock markets to crash. It has changed the business world completely and a strong view prevails that “things will never be the same again (TWNBTSA)” But, is this really true? What is the long term impact of Covid-19?

Lessons of the past

The world has faced many economic shocks over the last 100 years or so. These include two World Wars, the Spanish Flu, the 1930’s Dust Bowl, followed by the Wall Street Crash and Great Depression in the US. Not to mention the 1970’s Oil Crisis, the International Financial Crisis of 2008. There have of course, been many others.

During and after all these crises many experts felt that the economic and business world had changed irrevocably and TWNBTSA. What happened, in reality, was that although many things did change, at their core, things remained pretty much the same. In fact, the economic world is in constant change whether there are external shocks or not.  

Business models

When we say “TWNBTSA” one of the things we are referring to is the way businesses will be set up and run. We ponder what will be the typical successful business model of the future?

Looking at the aftermath of previous financial shocks, we discover that basic business models have not really changed in any fundamental way. For example:

  1. Customers still buy from those who supply superior, cheaper, more innovative goods and services.
  2. Efficient, customer-friendly businesses are still more successful than inefficient, old-fashioned ones.
  3. Commercial success is still achieved through superior technology and management.
  4. Those with an entrepreneurial mindset are more still successful than those without, and so on.


This is not to say that things haven’t changed. Of course they have! But as I said earlier, the business world is always changing. Consider, for example, the industrial revolution, the railways, the motor car, the telephone and the computer. All these brought about profound change to the way people did business and how fortunes were won and lost.

So what do we expect will change post-Covid-19? What has happened in the last six months will give us some clues.

The most obvious changes have been in shopping, working from home, international travel and investing. Let’s look at each of them in turn.


In imposing a lock down, Government effectively closed all bricks and mortar shops, excluding essential food outlets. Most shopping was, subsequently, done online. Is this the future of shopping and has the change been brought about by Covid-19?

It’s common knowledge that high street shopping has been declining for years with out of town and online shopping replacing it. The virus closed out of town shops too, so online shopping has increased even more sharply at the expense of the traditional ways. But, the virus is not responsible for the long term decline in high street shopping. It has merely accelerated what was an established trend. 

I expect this trend to continue. However, bricks and mortar shops will adapt and still have an important part to play in the shopping experience of the future.

Working from home

The lock down imposed by Governments all over the world resulted in a huge increase in the number of people who previously worked in offices now working from home. Will this be a permanent situation once Covid-19 has passed. If so will this reduce the demand for and value of office space?

Covid-19 has had a devastating effect on business
The world-wide influence of Covid-19

Property expert

When considering the long term impact of Covid-19 on property, a well known property expert based in Sydney, said the following:

“In recent history there’s been a trend towards higher density occupancy in modern offices. This has resulted the reduction of office space footprint for most large organisations, by basically fitting more people into less space. However, economic growth over the last decade has resulted in more companies requiring commercial real estate, albeit on a smaller footprint, but net demand has increased.

However, social distancing and hygiene vigilance off the back of COVID-19 may buck the trend of higher occupancy densities resulting in each staff member requiring more space m2. If hot-desking is a victim of COVID-19 then this will also kill ‘Dynamic Densities’ should staff demand having the same workspace every day. This on its own would mean large organisations would require more office space, but I suspect one driver for the long-term adoption of working from home will be opportunity for large organisations to offset the need for more office space but adopting working from home permanently if efficiency gains aren’t compromised.

Future workplaces

Then there’s the issue of how future workplaces will need to be modified to accommodate the privacy and noise issues of constant Zoom or Teams style meetings if some people are working in an office and some people are working from home – this too could have an impact on occupancy densities for the need to incorporate a larger quantum of break out spaces or the creation of a greater number of smaller meetings rooms further lowering occupancy densities.”

So, the prognosis is that probably space requirements will not fall in he long term, which means the value of prime office property will hold its trend.

See more on this in the forums at:

International travel

There are three major issues effecting international travel at the moment:

1. The need for social distancing.

2. Quarantines enforced by Governments.

3. Passenger fear of infection.

It is difficult to see how these issues will be resolved unless and until a Civid-19 vaccine is produced. Numbers 1 & 2 above could be removed when it is felt the virus has been contained. But passengers will still be fearful of being cooped up in a confined space with strangers for a long period. So, it is also difficult to see how airlines can change their business model short of drastically reducing seat numbers and isolating passengers from each other. This would certainly be the death of low cost airlines and, perhaps, all airlines for at least the mid-term.


The short term effect of the onslaught of the virus was to reduce share the price indices of the major Stock Exchanges by 40% or more. Commercial property and retail values also fell substantially, while house prices were marginally depressed. However, the government reduced bank rates (interest rates) further from a low base and, in some countries, to a minus interest rate. This factor that usually increases the prices of assets. All this is very dramatic and a tad confusing, but will Covid-19 change the long term nature of investment?

In the case of shares, world stock markets, although still volatile, have recovered most of their losses. In the case of the NASDAQ, more than all its losses. Shares in certain sectors (such as travel and entertainment) have not recovered and could remain depressed for a long time. I expect that difference in industry performance will continue as will the old problem for investors of what to buy. But I can’t see any long term change to the fundamental principles of investment.

It is probable that high street property prices to continue to fall, unless they can be converted to residential use. However prime commercial property prices will probably remain unaffected in the long term. House prices will probably continue to go up at their long term trend rate.


So, what is the long term impact of Covid-19 likely to be? Will things will never be the same again? Will the way we do business change irrevocably? Not in my opinion.

I think in a very short time most businesses will be operating fundamentally as before, but that change will continue for the reasons it has always done. The rate of change will accelerate, but due more to Silicon Valley than Covid-19.

Further reading

Please refer to FAQ 3.37:

And John’s Blog:

Also see: