So NSW & Victoria is/about to discourage work from home & removing mask mandates in the office
So what say you? Take interest rate rises (even expected ones) out of the equation
Will The Cessation of Working from Home Drop Outer Suburban/Regional Prices & Boost/Maintain Inner City?
Boogerman on 20/02/2022 - 09:17
Poll Options
- 18Yes
- 65No
- 3Maybe - see comments
- 6Unsure
Comments
Most businesses micromanage. Unless you're in an 'in-demand' industry, you won't be allowed to work from home
Where are you getting this info from? Everyone I know in a corporate role has said that their workplace is moving to a permanent hybrid work model.
Every small business I've ever known, for non-in demand industries, would never let people work from home - its the profit maximising mentality of owners
Then for large businesses/public companies, National Australia Bank is a massive example the contradicts the narrative:
https://www.theage.com.au/national/victoria/end-work-from-ho…Business leaders have increased the pressure on the state government to get hundreds of thousands of Melbourne CBD workers back to their desks by ending work-from-home recommendations and mask mandates.
Mr McEwen, whose organisation has two office buildings in the CBD and Docklands with space for nearly 10,000 workers, was “outspoken” during the talks on the need to get the CBD moving again. Earlier in the day, the NAB chief executive told breakfast radio that one of the bank’s buildings, which can accommodate up to 6000 workers, was at 2 or 3 per cent capacity.
@Boogerman: The retail association are pushing hard to collect their member's fee.
Commercial CBD rentals will slowly die. WFH is the future.
@Boogerman: And who were those business leaders?
including NAB chief executive Ross McEwan, City of Melbourne chief executive Justin Hanney, Property Council head Danni Hunter and Australian Industry Group Victorian director Tim Piper.
Yeah okay they wouldn't be biased at all.
From my experience and from speaking with those around me it seems most companies are more worried about a potential staff exodus if they move back to working from the office full time or they're counting the dollars they can save from downsizing their office spaces.
Telstra has already made the workforce flexible. Meaning as long as you do your role, you can work from anywhere. I know a couple of people who moved back to European countries but have still maintained their role. I wouldn’t call their positions “high demand”, they’re just PM’s (Not “just pm’s”, but there’s a heap of pm’s out there and I wouldn’t call them in high demand positions)
And have you called Telstra for support lately?.
Might work for them, but not their customers.
@RockyRaccoon: I mean… Have you called Telstra prior to their staff working from home? I don't ever recall it being any good.
Not forcing them yet…. Those major companies have a large interest/cost sunk in the office. They'll want to start using them again.
"Not forcing them yet" - plenty of people can't grasp a month ahead, let alone a year or decade
plenty of people can't grasp a month ahead, let alone a year or decade
Plenty of retail and office businesses can't grasp a month ahead, let alone a year or decade.
Technology is putting them out of business. It's inevitable.
@rektrading: Amazon have a loooong way to go with automated warehouse picking, packing & freighting.
Starbucks have a fair way to go also with autobot coffee delivery in storePlenty of retail and office businesses can't grasp a month ahead, let alone a year or decade.
Picker packers can't WFH.
Legacy bank workers can.
People WFH is better for the environment. Fewer cars, less traffic, less noise, less rubbish, fewer consumables, in short, less of everything.
@rektrading: I was picking a company supposedly at the 'cutting edge' of technology - in the top 5 for market caps
As for the impact of small business:
https://www.aph.gov.au/About_Parliament/Parliamentary_Depart…Growth in median employment per job between 2012–13 and 2016–17 was highest for FIRMS EMPLOYING FEWER THAN FIVE EMPLOYEES (at 2.9 per cent per annum).
The private sector accounted for close to 97 per cent of all jobs filled nationally in the 12 months to September 2019.
@Boogerman: It's the way the world works.
People don't want to waste 1hr to 2hr travelling to and from work.
I used to waste 3hr going to work with no pay. I now roll off my bed, walk 5 metres and can start checking my emails.
Office hours are dead. Technology always wins.
@rektrading: Ultimately I agree with your points. But in the short term (months to a few years) the argument doesn't hold
Micromanagement & ego stroking override the sensibility of profitability - heck even Amazon reintroduced society to 'time/motion' working policies worldwide, when it was long thought discarded in management theory since its research a century ago.
Depends on the company but most I've worked at have a management team that understands the definition of a sunk cost (some have no concept of that and will push using a thing anyway though). Simply because they're paying for something doesn't mean it has to be used, especially once they realise that working from home is now seen as a perk for many employees.
Plus not all of them are that locked in for the long haul. Aust Post is moving out of the CBD in a couple of years because their lease is up at Southern Cross, instead moving to Richmond where they'll save a pile of cash. 18 months NAB themselves mothballed their Docklands offices - it was cheaper to move everyone to their one Bourke St office who was actually coming in. It's still cheaper to keep buildings empty and have everyone working from home than it is to have everyone in the office where they're using company aircon, company electricity, etc.
Plus NAB have a secondary interest, people aren't spending as much money working at home. Savings have gone up, credit card debt has plummeted and NAB do better out of moving interest rates, they're definitely more interested in things than just using their offices.
NAB has a lease in Docklands until 2027. Just watch as in a few years they switch from "everyone should get back into the city" to the headline "NAB downsizes office space, moves to hybrid working, says this is the future of working" in about 4 years. CBD offices used to be seen as preferable because no one liked working in the suburbs (a place I worked at in 2017 wound up canning plans to move out of the city because of the potential loss of employees) so companies paid a premium for the space. They're all over hybrid working in the long run because you only need an office big enough for 40% of the numbers you usually have, in places that can be less convenient.
NAB themselves mothballed their Docklands offices
Linking to a article from mid 2020, when covid was ramping up and endless lockdowns had been happening, lockdowns still on the table, no vaccine in sight. Of course all companies had been going to 'mothball' offices, also don't overlook it was the gov directive at the time. NAB was following the advice/law 'allowed' at the time, as the article said 'The announcement came as the Victorian government increased restrictions'
it was cheaper to move everyone to their one Bourke St office who was actually coming in
GASP So you're telling me, that NAB worked out it was cheaper to run one empty office that can hold up to 6000 staff but only had 20 staff on site, than two near empty offices with 10-20 staff each? Amazing! (Yes 20 staff, as per the article you linked above).
Plus NAB have a secondary interest, people aren't spending as much money working at home
NAB has no control over what other companies do. NAB can't go tell tell Auspost for example that all their staff must work at home as its better for NABs bottom line.
NAB has a lease in Docklands until 2027
A lot can change between now and then, bit like how much has changed from 2 years ago. If someone back in 2019 said that in 2020, most of the world would be under some kind of stay at home orders, you would have been laughed at.
Aust Post is moving out of the CBD in a couple of years because their lease is up
Auspost has been moving offices a lot. Its part of cost cutting and saving on office space. For example they exited rosslyn street offices, years before covid as part of cost cutting.
Depends on the company but most I've worked at have a management team that understands the definition of a sunk cost
and most middle management likes to look over their flock of staff and make sure they 'appear' to be working.
Linking to a article from mid 2020, when covid was ramping up and endless lockdowns had been happening, lockdowns still on the table, no vaccine in sight. Of course all companies had been going to 'mothball' offices, also don't overlook it was the gov directive at the time. NAB was following the advice/law 'allowed' at the time, as the article said 'The announcement came as the Victorian government increased restrictions'
I'm not sure you caught my point, the point was it's still cheaper to mothball an office than have people in it. Having 6,000 people in an office isn't cheaper than 20.
Sunk costs are sunk costs, you don't get them back by spending more money.
You're right though, that article is from 2020 and talks about how they'd move back into 700 and 800 Bourke St once it's over. Since then things have changed, instead of saying they'd keep 800 Bourke St they're now subleasing it out and moving out permanently.
GASP So you're telling me, that NAB worked out it was cheaper to run one empty office that can hold up to 6000 staff but only had 20 staff on site, than two near empty offices with 10-20 staff each? Amazing! (Yes 20 staff, as per the article you linked above).
Again, my point was that it's cheaper to leave buildings closed than run them. Look at what you said again, you're saying they'll want to use them just because they have them, that's simply not true. As above, NAB is subleasing 800 Bourke St instead.
NAB has no control over what other companies do. NAB can't go tell tell Auspost for example that all their staff must work at home as its better for NABs bottom line.
Except if you read up a little, NAB is putting pressure on the government to get people back into the office. There's no need to make loud public proclamations about returning to the office unless they have something to gain.
A lot can change between now and then, bit like how much has changed from 2 years ago. If someone back in 2019 said that in 2020, most of the world would be under some kind of stay at home orders, you would have been laughed at.
So you're saying that people successfully working from home over the past 2 years has changed somehow? Was there a pandemic that made it safer in the office that I don't know about?
There was a massive global pandemic that changed things from 2019, what has changed since 2020 to make working from home not a thing anymore?
Auspost has been moving offices a lot. Its part of cost cutting and saving on office space. For example they exited rosslyn street offices, years before covid as part of cost cutting.
They moved all the staff from Rossyln St to QV. It was a prime piece of real estate for development because Auspost had low density offices on the site. I think the tens of millions they sold it for was the driver, not ongoing cost cutting (I imagine QV cost more)
and most middle management likes to look over their flock of staff and make sure they 'appear' to be working.
Fortunately middle management don't make the decision on where staff are located, upper management do. Just wait, 2026, NAB will either get a massive discount on their lease or move out because it'll benefit them. Right now they're downsizing as much as anyone else is.
I'm not sure you caught my point, the point was it's still cheaper to mothball an office than have people in it.
It doesn't take a rocket scientist to know that when you have under 50 workers working in all your offices during 2020 covid outbreak and the rest won't be back for 12 or more months that it is CHEAPER to have just one office open. Even the office that was open, I'm sure they shut down floors etc
There are many offices around that are 'mothballed' as you would call it aka closed have no workers in them, not getting cleaned etc. But won't take long for them to spring back to life when needed.
Again, my point was that it's cheaper to leave buildings closed than run them. Look at what you said again, you're saying they'll want to use them just because they have them, that's simply not true. As above, NAB is subleasing 800 Bourke St instead.
Again, GASP So you're telling me, that NAB worked out it was cheaper to run one near empty office than run multiple empty offices? Who would have thought.
Except if you read up a little, NAB is putting pressure on the government to get people back into the office. There's no need to make loud public proclamations about returning to the office unless they have something to gain.
Its not NAB, its the entire CBD that is doing that. All those building owners and worried people are not returning quick enough, all that office space is useless, all the cafes are empty and not renewing leases or paying rent, all those over prices parking buildings are empty. You say NAB wants to sublease space out, but to who? There is so much empty office space in the city, its not funny!
So you're saying that people successfully working from home over the past 2 years has changed somehow?
Saying people successfully worked from home is a bit of stretch. I know many people who have costed for the last 2 years at home doing as little as they can. Sub standard work has been accepted as the normal during a 'global pandemic'. Sure some people worked successfully, many did not or have not.
How many times have you accepted poor service as it is a 'pandemic' and people are working from home? How many times has one of your co workers not completed work on time for whatever reason and blamed 'covid'?
How many projects are 'delayed' because of 'covid'?
There was a massive global pandemic that changed things from 2019, what has changed since 2020 to make working from home not a thing anymore?
Companies changed as they had to, it was how they continued to make money. Bit like how retail workers HAD to go to work, and delivery staff had to delivery your parcels. We didn't see these people working from home did we?
Don't kid yourself the covid pandemic turned the world into two classes of people. One class who hid at home ordering food and parcels online, while another sub class had to go to work and brave the harsh covid world risking their life to deliver items to people hiding at home.
Once the pandemic is over, things will change again. Even big companies like google/apple have said you're coming back into the office. So those hiding workers will have to come out again, while some never left.
They moved all the staff from Rossyln St to QV. It was a prime piece of real estate for development because Auspost had low density offices on the site. I think the tens of millions they sold it for was the driver, not ongoing cost cutting (I imagine QV cost more)
QV gave them a good deal, that deal is over, so they are moving again. Rossyln St was a old building with many issues, it was also the old Data Center for auspost too that they had been exiting, they had many reasons to exit the building.
Fortunately middle management don't make the decision on where staff are located, upper management do. Just wait, 2026, NAB will either get a massive discount on their lease or move out because it'll benefit them. Right now they're downsizing as much as anyone else is.
Middle management talk to upper management, so they'll get what they want more than the plebs. While the plebs do what they are told. Sure you might think you have the 'power' to stamp your foot and say no I'm not coming back in to the office, but you don't make these choices. Something about the tail wagging the dog applies here.
You can have your view on what you think will happen, I can have mine. They don't have to be the same.
@freefall101: cough cough look what we have here…..
https://www.news.com.au/national/victoria/politics/victorian…
@JimmyF: Lol, did you forget what you were arguing for? No shit the government and cafes want people back in offices, your argument was businesses will bring people in due to paying for offices anyway.
That NAB is subleasing offices in a dead market to get whatever money they can should tell you everything.
They want to kick people out of their WFH to collect taxes from walk-in shops.
It's not going to happen. People are smarter now that they know they can save time and money WFH.
Working from home is here to stay, maybe not to the same degree as now, but the concept is firmly entrenched in the work environment.
So for those who wish for permanent WFH, be careful what you wish for.
If you insist on WFH then you need to be aware, anybody anywhere in the world can now compete for your job. We've already had manufacturing jobs outsourced to cheaper countries. How about outsourcing office jobs? It can happen too. Then what are we all going to do here?
Mining and real estate.
That's a really good point.
My missus' business 'survived' the pandemic by being forced to look overseas. The cost savings were enormous. Consequently, its a permanent change.I think the majority of companies will be moving to a hybrid model with 2-3 days a week in the office. Roles that can legally and reliably be outsourced to cheaper countries already have been.
If the only reason my employer kept me is because I could physically show up in an office, then they would have gotten rid of me long ago.
I know people who worked from home permanently prior to covid. They were very good communicators, self motivators and had a proven ability to do what they do. They were available via phone all the time. WFH jobs existed everywhere and I suspect there will be more of them going forward.
But you can't just ship that overseas. Mostly these people had years of experience in the office, they knew the culture, they still attended events and training from time to time, the fact they were in the same time zone and spoke the same language was key.
It's why so many IT jobs were shipped overseas the past couple of decades, code is code no matter where you write it. But having worked with teams where there were 5 people in Australia and 50 in India it came with its own difficulties as well. Having to twiddle our thumbs because it's 3am in India, and having to run everything through multiple layers of people became a huge chore.
I expect newly established companies hiring for WFH positions won't have geographical preference. Yes - your employer might not replace you. But your employer will be eventually replaced. And companies that replace your employer won't care where you are.
You might be thinking this won't happen anytime soon and by that time you will be retired. Fair enough. But we are discussing where this is all heading, not what is going to happen to you specifically.
I believe CBDs will eventually discover new purpose. I don't know what it will be but it might not be office work anymore.
It depends what is the framing or connation of your question.
Will "outer suburbs" suddenly see a price fall over the next 12 - 24 months with prices at the end of that period markedly lower than they are now? Highly unlikely.
Will there be a "reversion to normal" over the next 2 - 5 years that sees "inner suburbs" see higher rates of capital appreciation relative to "outer suburbs"? Quite possibly.
I must be one of the few who are actually looking forward to returning to the office! I miss the social side of work!
I don't expect it to be the full five day week though, so I doubt it'll drop the prices of anything. Even pre-pandemic, the city was already expanding further and further out. But I do think it'll boost inner city values - there's always people who are willing to pay for convenience.
Only reason I’ve been in the office in the past 5 years, was to catch up with people for lunch, or some super important meeting
Did someone say METAverse?
It's coming.
Source: VC and increased funding from the legacy industries.
There is a lot of money that requires a CBD based business environment.
This means that there is this constant noise from building owners (including industry super funds!) that return to the CBD is necessary.I think the reality will be different. Some employers will really try and persist with enforced CBD. Some workers will be fine with this. If you are a middle manager with a 20min commute from an inner suburb, it isn’t a big deal to commute. But even many of these will be reluctant - immeasurably more if there is a new COVID variant, but also just because they can pick up the kids after school and have a nice breakfast in the morning.
But a big chunk of people commute over an hour every day, many even more.
Those workers will be very motivated to find another employer if forced back too much.My employer had close to zero WFH a couple of years ago. Now we have employed staff in other cities where we don’t have offices at all. We can get access a broader field of candidates, and frankly, save office costs and probably save a little on salaries.
If you work in a low differentiation field, you probably will have fewer options. And the risk of being off shored has also probably increased. But if your job has value because you are good at it, and have some power in the hiring process, I expect there will be plenty of WFH employers.
Even if you work in a call centre, or other role which has seen a lot of offshoring in the last 20 years, that your job remains in AU is a good sign you can find a similar WFH job.
The financials mean WFH staff are something like 20% or 30% cheaper than paying for a CBD desk. If your employer isn’t sensitive to those kinds of cost advantages, their competitors will be, and they will flourish at your employer’s expense.
It works both ways - if you don’t want to work in the CBD, don’t. Find a job that suits you. If all you have going for you is a preparedness to commute, I suspect you will find yourself being out competed by cheaper staff sitting in a 3br home in Adelaide or Hobart, or outer Sydney or Melbourne.
For all their brave talk, the dollars are where it lands, and employers like Westpac have closed whole floors in Barangaroo already. Why would they seek to sign new leases to up their costs to force employees back?
Working from home is the greatest thing for Australia. Local suburbia is as busy as ever and small businesses are thriving from it.
That's what community building looks like, when people can make a living and have a stake in their own backyards.
Exactly; there are no complaints from any business groups or landlords etc., that cover suburbs or regional areas.
And those communities are benefiting from more people having more time to participate in the community, instead of only being available outside of business hours + commuting.
Suddenly, the local sports clubs have more people engaged, the local volunteer organisations have more people engaged, local businesses are busier and employing more people (if they can find them).
Offices spaces, floors will be retrofitted out to become new apartments of the future. This will reinvigorate the CBD economy. This is the only way to appease the various groups.
I’m banking on only returning to the office 1 day per week long term.
I recently moved to the regions to be closer to family. I’m lucky in that my skill is in short supply in Australia and that half of my team is spread across the country and India.
Worst case scenario will be 2 days in the office but if there’s no agenda for the office day, I won’t be going.
Most larger companies (that I know, certainly not all) are pushing for days in the office to be focussed around team building and workshopping.
Coming into the office to be on Teams calls isn’t going to help with that.Our regional town an hour outside of Melbourne has been flooded with new home owners from the city. My property value from 4 years ago has nearly doubled and large acreage properties are still selling.
I don’t see our property values decreasing but I feel like we are at the peak sell price now and will flat line for a bit.
More commuters were pounding the pavement in the Melbourne CBD on Monday morning after mask rules were loosened, but many say the return to in-person work has already begun in earnest.
The mandate to wear masks in offices and other indoor environments was removed at 11.59pm on Friday, while the public health recommendation for Victorians to work from home was also scrapped.https://www.theage.com.au/national/victoria/a-maskless-monda…
And as the culture shifts back, so it becomes a standard expectation
Just because the government says “go back to the office”, a lot of major companies are not forcing their staff to go back.