The Value of Your House in the Digital Era

When it comes to property in Australia, our major focus has been how much prices will rise – or fall.

As we traverse the most uncertain period in the property market in the past three decades, it’s time investors started considering how technology is contributing to the value of their assets.

In these tight and increasingly regulated markets, looking at the technological aspects of our modern-day caves might just enhance returns.

So, here’s my top 14 list of technological and regulatory shifts affecting all things property:

1. Pre-Fab & Robotics: While this is already a long lead trend, we can expect less of volume builders to do their work on-site. Increasingly, volume homes will be built offsite and transported in pieces to where the house will be put together like a Meccano set. This enables vehicle-like manufacturing efficiency and accuracy in the build process. Australian outfit Modscape provide an early example of how the bricklayer and carpenter could be technologically disrupted, both with their build process and the robotics they are now adding to the construction process.
    
2. Sustainability Mandates: We ought to expect buildings to move quickly from 6 star to ZEB. The ZEB movement (Zero External Energy Buildings) as a movement will gather pace as we head towards 2030. Given that the Albanese government has legislated an emissions reduction target of 43 per cent from 2005 levels by 2030 and net zero for 2050, buildings will need to become their own power plants, capturing across a multitude of surfaces and storing all their own energy to run themselves. This has already been achieved in many modern buildings including this example in Ontario, Canada. To go off-grid in Australia with an average-size home using solar, battery and back-up generator currently costs around $30,000. By 2030 we can forecast it to be well under $10,000 and be a self-funding proposition – that is, the cost of capital will be less than the energy bills it replaces. At some point, this model will need to be mandated by the national government if targets are to be met.
    
3. Smart Glass: Glass will do much more than provide a view to the outside world – it will take us right around the world. Advances in nano-technology can already be used to turn windows into solar panels, and shortly they’ll all be able to be converted into web-enabled yet transparent screens which can do everything your smartphone can and maybe provide a harbour view which isn’t even real!
    
4. EV Chargers & Batteries Mandated: There’s barely a car manufacturer in the world which hasn’t promised a full shift to EV’s by 2030. This means every place a car ‘rests’ an EV charger needs to be in place. With more than 10 million dwellings in Australia, we have a job to do. We should also understand that EV charger installation at a cost of around $2,000 each represents a $20 billion economic opportunity. The same can be said for in-home batteries. While 30 per cent of Australian homes now have solar only two per cent have in-home batteries to match. A smart government would mandate this in new homes and provide incentives for existing dwellings to get energy storage. We’ve done similar things historically with heating, electricity, water tanks and safety measures, and this would take significant pressure off a transitioning grid. 
    
5. The Energy Internet: Once the above is installed, we can get real about the Energy Internet: This is exactly what it sounds. Instead of sharing and trading links, video and images, we’ll trade our excess electricity across wires to other people in different parts of the state and country, rather than energy providers. It’s a much better solution than putting energy back into the grid for a tiny percentage of the price they sell it for. The future of energy will be highly distributed, just like the internet is: We’ll generate, store and trade energy, in much the same way that we currently trade content via our in-home computer systems.
    
6. Modular Homes: The smartphone is the template for physical innovation: modulatory. The home of the future changes its shape depending on the needs of the end user. Instead of software, spaces will change their shape based on people’s needs. Mobile walls and changeable rooms will create the flexibility needed across different times of the day and week. Think hotels and convention centres.
    
7. Tiny Homes: The tiny home movement will blossom as a positive externality of the Work From Anywhere shift. With the cost of land being far lower in regional areas, ‘plug and play’ housing will become commonplace. It’s also the perfect storm for large firms like Amazon and Ikea to enter the real estate space and continue their growth trajectories. 
    
8. Asset Utilization: If Uber and Airbnb taught us anything, it’s that data on location and availability can increase asset utilisation rates and activate idle assets. Commercial property will start to look a lot more like these two technology start-ups, allocating the use of spaces based on the time of day, week and year. Commercial real estate become an on-demand asset and have different tenants and change configurations across a single week or even 24 hour period. The future is flexible.
    
9. 3D printing: Construction will become exponential as 3D printing start-ups begin to produce low-cost housing (they are at least 40 per cent cheaper than bricks and mortar) and can also build beautiful bespoke ornate concrete. Building facades common in the CBDs of Melbourne and Sydney will become possible again at zero additional cost.
    
10. Affordable Housing Mandates: I remember growing up in the outer western suburbs where new housing estates were literally carved up blocks of land with zero greenery or amenities — community deserts with brick veneers. These days, greenery, schools and other community requirements are placed upon the developer. Soon they’ll be adding low-cost dwellings to the equation. Much like inner city commission housing towers, expect to see low-cost and government-funded housing mandated as part of any new development.
     
11. City Reconfiguration: ‘Real vacancy rates’ have to be around 50 per cent. Forget the stats – think here, empty cubicle farms. With this persisting, office towers in CBDs will be converted to residential living. Ground-level cities will also change to reflect this as private vehicles and parking spaces get replaced with greenery and modern micro transport options.
     
12. Digital Twins: Expect every house to have its own digital twin. This will improve both the management of the home and the ability to rent or sell any dwelling. Real-time information on how a house operates is maintained and real costs will become an asset to any property which will increase its value. This will also overlap with the energy internet.
     
13. Renter’s Rights: As a residential landlord in Victoria, every time I do an inspection I now panic that the walls have been painted pink and their dog’s sharp claws have ruined my shiny floorboards. I better get used to this and more. As Australian cities now sit clearly inside the world’s most expensive cities to live in – it’s only a matter of time before we get more significant rent controls like New York and London.
     
14. Smart Contracts: Overlapped with digital twins, these will streamline the management process of properties — ownership transfers, taxation, management, tracking of utilities, even plugging into the energy internet. They have the potential to vastly streamline property management and investing.

The basic premise of this is simple. Smart things, modularity, AI, materials science and energy are about to impact our physical world.

The next era of the web isn’t digitization – that’s been done — it’s using digitization on physical assets like property. Property is by far the world’s biggest asset class, and those who pay attention to new efficient possibilities and regulatory realities will outperform others in a tough market.