There are several lasting impacts from COVID for shares vs. property, with the days of ultra-low inflation and interest rates and expanding globalisation likely behind us.

So, what does this mean for investors with money in shares and property?

In this article, AMP chief economist and head of investment strategy Dr Shane Oliver outlines some of COVID's ongoing economic impacts, and we provide our take on how they affect shares and real estate.

Dr Oliver says more people want the government to solve all problems through greater regulation, taxes, spending or education campaigns. Many people favour the return of some manufacturing to home soil, and the energy sector wants subsidies to help fund green projects.

Impact on shares vs. property: Dr Oliver thinks this could lead to less productive economies and lower living standards, neither of which supports equity values and property prices.

High levels of underemployment in Australia contributed to many years of low or no wage growth, says Dr Oliver. After the pandemic, the labour market tightened and wages are growing. The risk is that wage growth gets too strong to keep inflation within the Reserve Bank's target band of 2% to 3%.

Impact on shares vs. property: Wage rises are a big cost to business, however, strong employment keeps property prices stable and is a factor in low home loan arrears today.

Dr Oliver notes that inflation is coming down, but COVID has created a "more inflation-prone world" through things like a push for less globalisation, which would increase product manufacturing costs.

Impact on shares vs. property: Higher inflation means higher interest rates over the medium term. Generally, speaking, neither is good for shares or real estate.

Australian home prices surged to record levels during COVID, but higher interest rates have put pressure on mortgagees. At the same time, we have a housing shortage with projects delayed due to higher costs and labour shortages. Meantime, surging immigration has added new demand for housing.

Impact on shares vs. property: The housing shortage is pushing property prices higher, benefitting current owners. But it also means some businesses operating in regional areas, like renewable energy providers, can't attract workers because there isn't enough local housing available.

Dr Oliver says working from home is more prevalent among white-collar workers with computer-based jobs. He reckons the ideal arrangement is a hybrid model. This ensures some productivity control for businesses while meeting workers' demands for flexibility.

Impact on shares vs. property: Less demand for office space is resulting in lower commercial property valuations, higher vacancies and lower rents. This is problematic for some ASX REITs. Some businesses have been able to downsize their corporate offices, meaning lower costs. Workers' return to CBDs has led to more demand for inner-city apartments among residential renters and buyers.

COVID turbocharged the digital economy. It forced retailers to go online and enabled tech companies to sell new products enabling better workforce management.

Dr Oliver said:

It may be argued that this fuller embrace of technology will enable the full productivity-enhancing potential of technology to be unleashed. The rapid adoption of AI will likely help.

Impact on shares vs. property: Artificial intelligence may be a productivity game changer for businesses, leading to greater efficiencies and potentially greater earnings. Meantime, property conveyancing is now electronic with the advent of digital exchange platforms like PEXA Group Ltd (ASX: PXA).

The S&P/ASX 200 Index (ASX: XJO) rose by 2.57% in the month of March, while Australian home values rose by 0.6%, according to CoreLogic data.

Perth is the strongest metro property market in the country right now, with home values up 1.9% in March. Regional Western Australia is the strongest regional market with 2.1% growth in March.

Meantime, the ASX 200 share with the highest price rise was Life360 Inc (ASX: 360), up 63.42%.

West African Resources Ltd (ASX: WAF) shares rose 39.53% and Ramelius Resources Ltd shares (ASX: RMS) lifted 32.86%.