Real estate uses will dramatically change in the next decade if not sooner.
The future of real estate will be influenced by disruption technology as people change the way they shop, travel and even grow their food, a world-renowned professor of real estate says.
San Diego University professor Norm Miller, recently said at an international property conference, said the technological innovations coming, from self-driving vehicles to AI and robots, alongside demographic trends, will cause dramatic changes in real estate and it’s not a matter of if but when.
“Ten trends will change real estate as we know it, with less need for on-site parking, less office and retail space per capita, more data storage space, more aged living space, more experiential spaces of all sorts, more recreational space, collaborative workspace and more logistics space.”
Some of the biggest trends include:
• Batteries: Research on batteries and scaling up production is creating strong global demand for lithium and cobalt. The Chinese have been wise to go after these resources. Research suggests within five years batteries will last five times as long and be rechargeable with almost no degradation. This is a game-changer for cars, trucks, drones, pacemakers, phones, robotics and more. It will transform many economic processes and open up new worlds of automated tools for security, data mining and transport.
• Robotics and automation: They will mean either a lessening of the individual work week or a higher rate of permanently unemployed people. New uses will be developed for robots from monitoring childcare to aged care and search and rescue missions. From truck and Uber drivers to factory workers to farmers, there will be less need for labour for the same output.
• Machine learning: It will allow systems to continuously improve from better elevator and HVAC systems to better marketing and assistance on all sorts of tasks. Every field of work will eventually become enhanced with respect to decision making, with artificial learning from continuous data mining.
• Building Design: Bio-mimicry, composite materials and 3D printing: Buildings and products based on nature’s designs are stronger and lighter, enabling better buildings and less waste, higher floor to ceiling interiors that let in more natural light and control interior temperatures better, utilising solar, geo and wind energy, with passive solar designs. 3D printing allows more complex designs that will create a feasible design and production explosion never before possible.
• Climate change: Farmland in Canada, Russia and northern climates will generally become more productive. Land in the southern cone of South America could also benefit from climate change. However land in the southern US will decline in value. Low-lying land all over the world from Nauru to the Florida Keys and Bangladesh will be subject to more flooding and higher insurance costs, become less valuable and eventually, even the optimists will need to move away from low-lying coasts and delta regions. Coasts will see declining price premiums as flood risks offset the view premiums.
Prof Miller says these trends will change real estate because they will be economic – for example, there will be no need for truck drivers delivering food, goods and packages. “It makes society more productive but it means a lot of people don’t need to work in jobs they relied on before.
“Do we have more unemployed or do we all on average use that greater productivity to work fewer hours – shortening the working week – and cutting out those things that are automated or can be automated.
“Where people work is also going to be affected as we have more uncertain weather due to climate change. As travel becomes harder, people may rely on virtual meetings and underground travel. These things change real estate buildings and how we drop people off in cars, what parking we have, who is filling the streets, how we charge empty cars driving around waiting for their passengers. Those kinds of questions are yet to be unfolded.”
Prof Miller says there will be a more blurring and overlapping of services between offices, hotels, and apartments. “We are going to get dramatic changes in how real estate is used as well as the experiences we have whether we are at work, home, shopping or play.”