Real Estate Trends: The Phygital Age And How It Will Impact Property Investors
It’s called the phygital age – part physical, part digital. This is a new economic era where we have one foot on either side of the fence.
It began with coronavirus, but it won’t end with a vaccine. The reality is things have changed forever, and for real estate investors it means reevaluating your strategy and what you let influence your decisions.
Let’s look at some of the behavioural changes that we can expect from living in this new phygital world:
CITY LIVING WILL STILL BE FAVOURED
There has been a swell of talk that city living is going to dry up. Now that people have the opportunity to work from anywhere, the idea is to flee major cities and settle down in more regional areas.
But is the transformation of the workplace really going to recalibrate society to move in different migrational patterns?
Today Australia has approximately 25 million people, and more than 22 million of those people live in urban areas and big cities. So to say millions of people are ready to up and leave their current lifestyle is farfetched.
The trend of cities is all about people, innovation, ideas all combining together at a blistering pace to create outcomes and to create purpose. The social structure of human beings is not to live isolated, but to collaborate.
Big cities like Sydney and Melbourne still offer more socially and financially. They are filled with more arts and culture, entertainment and job opportunities than their smaller counterparts. On top of this, part of Australia’s business plan is to have cities that are continually growing – both urban and regional.
Melbourne will have 8 million people by 2050, Sydney 8 million people and Brisbane 5 million people. These are big cities! As a property investor, it’s important to understand that cities and demand to live close by aren’t going anywhere.
THE RISE OF SMALLER OFFICE SPACES
The phygital age has shifted the behaviours of the workforce exponentially.
We can expect to see smaller offices, with businesses offering their employees the opportunity to work either from home or the office – or both.
However, the office market will stay, as it becomes a lot less expensive than it once was. Downsizing won’t just mean physical space but rent prices for office spaces and overall cost per square metre.
The need for an office environment is still there. As a business, if you want to attract new work or clients you need a home base to do that. Similarly, if you want to attract the best talent you need to remain in a central location that considers convenience and mobility.
Of course, innovation is also better in the physical world, where collaboration can be managed and monitored.
SOCIETY WILL SHIFT SOCIALLY
Yes, collaborating is better managed at the office, but there are actually fewer distractions and higher productivity at home. This is where we start to see the social shifts in society forming.
With flexible working options becoming increasingly available, it is likely that people will start to break up their work week using a half-and-half working from home arrangement.
The great thing is commuting three days a week versus five days a week is actually beneficial for society.
The number one reason being the reduction of our carbon footprints. When our CBD’s are congested, we create a lot of environmental damage. However, opting to work in the city only three times a week means less movement and use of cars.
Social dynamics will change, with people now being able to spend more quality time doing things they love, whether that’s spending time with their significant others or families, or creating new hobbies.
A phygital world allows us to get back some of the time we used to spend commuting and doing business trips and instead focus it on our social lives and responsibilities.
WHAT DOES THIS ALL MEAN FOR REAL ESTATE?
This is what we now know as the age of responsive real estate.
Does your real estate respond to the new, phygital world? If not, I can tell you it’s not going to be the first choice when it comes to consumer purchasing. Now, liveability is everything.
When we’re working in the digital space it means we’re spending more time looking around where we live – and we might find that we’re not actually living where we really want to.
See owning real estate next to the train station was once a big priority for commuters who needed to get on the train quickly, but now in the same suburb is it better to own real estate next to the park and coffee shop? This was always a question of mobility versus proximity.
However, to create wealth today as a property investor you need to look for both – you need accessibility.
For now, accessibility will still be found in and around city areas, starting at the top in places like Melbourne and Sydney, and trickling down to smaller cities that are the biggest in their region like Canberra and Hobart.
If you’d still like to know more about the changing behaviours of real estate in the phygital world, come along to Positive Real Estate’s free property investing seminar.
Here we can discuss what other trends will impact your real estate in this new age and how to determine the accessibility of a property.
Spaces are limited so register now.
By Sam Saggers