Mega-cities, digital avatars, 6G and robots administering vaccines. Technology lies at the heart of many predictions for 2030, and for the property industry, the outlook is no different.
Had this panel taken place two years ago, the predictions for the year 2030 may have looked somewhat different, particularly where PropTech is concerned, but as we know the pandemic has proved the need for digital transformation and never have we seen such demand and a role for technology. Trends are being accelerated and augmented for a post-pandemic world. This has presented both opportunities and challenges for the industry, and the need for real estate to become more customer centric and sustainable has been made clear.
This is where innovation truly comes into play, in the form of new business models and technology solutions. The PropTech industry aspires to drive real change across a property lifecycle and will be fundamental to addressing major issues that affect us all over the next decade.
So what will the year 2030 look like? Our panel of industry experts shared their insights and predictions for the property industry…
Predictions for the residential sector focus on green space, community, affordability and flexibility, as well as a focus on last-mile services, with ‘beds, meds, and sheds’ available for convenient customer access.
Co-living with around the clock service every day of the year will continue to be a space of growth, especially with technology that makes this a viable and efficient
system. This includes sensors to monitor habits and behaviour as well as emotionally intelligent AI systems with human interface.
Another prediction was that affordability issues would become severe. In the UK, the number of property millionaires is expected to triple by 2030. These millionaires will be those who own property today, and the knock-on effect will be that challenges for first-time buyers get worse. The housing stock available today needs to be upgraded and the target of 300,000 new homes a year will need to be met as soon as possible to try to combat these affordability issues.
It was also suggested that tax regulations may mitigate the issues surrounding affordability. For example, one scenario would be the removal of the Stamp Duty and implementation of a Property Capital Gains tax system, thereby removing the pressure of taxation at the time of purchase and moving it to a later date, allowing wealth to accumulate for first-time buyers and putting a greater tax burden on the already wealthy to help with economic recovery post-pandemic.
Predictions for commercial properties followed the trends we have been seeing since the start of the pandemic.
For office space, co-working and satellite offices that provide workers with the flexibility to have a hybrid model of working from the office and from home are key.
Retail stores are predicted to become less relevant as more shopping moves online, but the spaces will be filled by experiential retail.
Life sciences real estate is set to become a core asset class, a trend that has been increased exponentially by the focus on pandemics and vaccines. It remains to be seen whether the UK has enough land to meet this demand.
Last-mile offerings will increase in value, again following the trend towards the customer experience.
Technology is both driving current trends and creating new commercial opportunities across the industry. It was thought that by 2030, abbreviations such as ‘PropTech’, ‘ConTech’, or ‘FinTech’ won’t exist anymore as they will be redundant, as technology will be inherent in everything.
The technology that can help the industry will become more sustainable, efficient and provide an enhancement to human capabilities rather than being a replacement of them. Dell Technologies was mentioned as having reported that 85% of the jobs of 2030 haven’t been created yet, but will come out of the technological boom we currently find ourselves living through.
In the public sector, government are driving technology adoption with initiatives such as digital planning reforms. Local authorities will need to adopt technology to streamline the planning process, which is currently inefficient, prone to errors and lengthy.
Modular construction will continue to thrive as it is more sustainable, affordable, and efficient than traditional construction methods, and will therefore help the industry meet its ESG goals.
The consensus on sustainability was that it needs to be viewed through a holistic approach. The built environment accounts for 40% of carbon emissions globally, and so any steps taken to mitigate that impact now will reduce the consequences from climate change in the future.
Climate change is already seeing disruption across many parts of the world, with extreme weather set to increase over the next 9 years. It was discussed that some major cities along coastlines may not exist anymore, and that investors will be seeking to research and try to predict what areas will be safe to build on and use as a safe investment for public and private funds.
Conversions, retrofitting, and repurposing is the most sustainable and cost-effective way to ensure carbon emissions are kept to a minimum. The initial cost may be high, but it is cheaper overall and healthier for the environment than buildings being left unused for a prolonged period.
Whilst this is an area where the public and private sectors must work together, policy makers are key in keeping carbon emissions down. There is a need for clear carbon accounting, and benchmark indicators such as ESG and GRESB are going to continue to gain momentum.
In the UK, the EPC ratings will have greater importance, with buildings presenting scores of C or below, for example, becoming unacceptable to customers. Building owners, be they commercial or residential, will need to adapt their buildings to accommodate for these changing customer focuses.
Alternative finance will bear the burden for providing finance for those with innovative solutions as the risk level, and the amount of trial and error, is too high for traditional finance.
Financial technologies such as Blockchain and the i-buy method from the US will see greater usage as transparency throughout a property’s lifecycle becomes more important to customers and building owners.
Simon Reid – Co-Founder & Director at Darvis UK Limited
Vivi Cahyadi Himmel – CEO & Co-Founder at AltoVita
Derek Pratt – Commercial Director at Sourced
Ami Kotecha – Co-Founder & Head of Venture Investments at Amro Partners
Michelle Corazzo – Director at haysmacintyre
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