16 Dec Melbourne’s shift in transportation habits – Part 1
One of the many reasons I am gripped by the property industry is because of the place it occupies in our lives. It is the most expensive and arguably one of the most important items we will ever purchase, it constitutes a special social and family construct that shapes who we are (think ‘The Castle’), and it is constantly at the forefront of trends and innovation.
Over the years we have seen houses in Melbourne benefit an entire generation of hard-working families who dedicated themselves to home ownership.
In recent years, as we grow into a more global city, so have the challenges and opportunities. One area that has grabbed the attention of a lot of us has been the shift in transportation habits by metropolitan
residents and how this is influencing the property sector.
This shift has come about quite rapidly, I have seen polarising beliefs even amongst brothers and sisters only a few years apart. Transportation is an integral part to any development as the age-old idiom “location, location, location” emphasises.
Properties located near a swathe of public transport have always commanded high prices than their more removed brethren, while car ports in high and medium density projects have always carried a premium attached to them when put into the context of the limited space in inner-Melbourne.
These entrenched rubrics of property pricing are now facing heavy scrutiny, in what could be the largest realignment of how we price property in years. The key to this reassessment is the advent of ride-sharing,
autonomous vehicles, and dockless e-vehicles.
Us Melbournians are all too familiar with Uber and the swarm of oBike’s that recently hit our shores. However, we have yet to truly appreciate or understand the concept of autonomous vehicles, much like the way some cities in the US are already gearing up for the inevitable.
As private companies compete in an arms race to get out the first commercially viable working product, cities around the world are playing catch up with regulation, while developers and policy makers are reassessing future urban planning pathways.
Driverless vehicles may seem like a futuristic concept, but they are very much real, and could lead to a number of positives in our society. Scientists, researchers, policy makers, and the police are constantly reiterating to us the dangers of driving without 100% clear vision and awareness, and it is from a lax approach to these habits that leads to countless deaths around the world.
In 2010, according to the World Health Organisation, road traffic accidents led to an estimated 1.25 million deaths worldwide. That is one person killed every 25 seconds. If we could even put a dint in this number through safer roads, it would be a boon to society.
For this reason alone, it seems inevitable that this technology will be upon us in the next decade, the question is what will be its consequences and how do we plan for it. In my research I have come across three very interesting future scenarios that all developers should be aware of. Firstly, our utilisation of vehicles and what this will do for our transporting habits will change.
Secondly, the impact of an influx of free space caused by the demise of car parks, and lastly the effect these vehicles will have on location and amenities inputs for developers.
Currently we use our cars 5% of the time, while they remain idle for 95% of the remaining hours. This is an area of opportunity, as autonomous vehicles will be able to continuously operate while you are at work or at home, possibly earning you income as your vehicle operates within a ride-sharing scheme.
Another option, which researchers believe will be more likely is instead of buying autonomous vehicles, there will be fleets of them owned by companies, in which they drive around all day transporting us to school, to our jobs, or wherever we may desire.
This dramatic change in transportation convention will almost eliminate the premiums placed on location, as individuals will have easy and accessible transport on demand from their smart device.
How property developers adapt to this will be an interesting narrative to follow in the future. Do we witness a rise in developments in the outer fringe areas that have historically lacked public transport?
Or will public transport remain steadfast and hold its place as a premium price setter? If driverless cars do in fact make public transit less important to commuters, this could have a major impact on the needs and demands of buyers, tenants and renters of office and residential properties.
We could be on the cusp of witnessing a large revaluation of residential property that had historically been priced poorly due to its lack of transport amenities.
Within this context, it is exciting to look towards the future at the opportunities that are all around us. Melbourne is a large sprawling city that still relies heavily on roads in the outer fringes and (amazingly) in some very nice areas 20mins out of the city. Will the arrival of these new vehicles alter the
Melbourne property landscape? Only time will tell.