How much do you think property investment will change over the next 5, 10, 20 years? How much of this change do you think will be attributed to technology?
Sometimes it’s hard to imagine how much impact technology really could have on the industry. Perhaps that’s because property is a “brick and mortar” investment. Unlike many other investments, you can actually physically see your property and you can see what’s going on in the market around it.
But this doesn’t mean that the industry is immune to advances in technology. And you probably know this. But many investors I’ve talked to don’t understand how this affects them, or what they can do to adapt.
Airbnb is the first thing people think of when I talk about technology changing the property market. And they’re right, it’s having an impact.
But technological advances that affect property aren’t necessarily direct. For example, consider the way people work and live.
Think about how many people can work remotely now – just look at Auttomatic, the latest tech company to shut its office because everyone works from home or abroad.
Think about automation. A new PwC report found that 38% of US jobs will be replaced by robots and artificial intelligence by the early 2030s.
When you start considering how dramatically these advances will change urban centres and the way we live and work, it starts to paint a bigger picture for the future of real estate.
I’m not saying people are going to move away from cities because they’ll all be working remotely. Quite the opposite actually – people are more likely to live in urban areas than ever before, a trend that’s on the rise.
There is a downward trend of the size of dwellings, with household sizes getting smaller in both Australia and New Zealand.
In 2011, the ABS recorded an average 4.5 people in every home, but in 2006 the average household was 2.4 people, a massive drop of 46% in just 5 years. The size of the average Australian home, historically increasing every year since 1985, has been shrinking since a peak in 2009. In New Zealand, one-person households are projected to become the fastest growing household type, increasing from 390,000 in 2013 to 580,000 in 2038 (Statistics NZ, 2015).
Cities have to future-proof to accommodate this trend. This will include all the usual suspects…
- More affordable housing solutions
- Better infrastructure
- Forward-thinking, efficient and reliable public transport
- Healthcare
- Schools and higher education
- World-class entertainment, culture and hospitality
But in addition to those, innovation and design will be the leaders in urban living.
This is what we refer to as a “flight to quality”. The idea is simple, and it goes something along the lines of the old adage, “buy the best you can afford”. The better quality your investment, the more likely you are to see better gains when the market rises.
If you’d like to learn more, we’ve written a whole eBook on the Future of Real Estate. Register for an event near you and download your eBook here.
Disclaimer: All information provided is of a general nature only and does not constitute professional advice. Seek advice from licensed professionals to see if advertised results are possible for your situation.