Everything in the world is interconnected. A little change here affects the complete framework that make up the business world. The Real Estate is one gold mine of a business opportunity and many things are created around it. Although in itself it is a business giant, the real estate dimension of the business world is still affected by the waves of change that create ripples of revolution in the business world. Technology is one thing that has continuously disrupted everything from finance to e-commerce in business. It has also affected the real estate in its own way. But one of the most surprising technological evolution that seems to be affecting the real estate business of the world is ‘driverless cars’.
Yes, you have heard it right. Driverless cars are going to be a normal part of our life in the near future. Many countries around the world are testing autonomous vehicles and intend to make them a regular part of commute for people. The big names involved with the experimenting and initiating the driverless car revolution are Google, Uber, Audi, BMW Ford, GM, Volkswagen and Volvo. This might seem like a great automobile revolution in the history of mankind but it has far reaching effects in all aspects of the business world.
So, how would driverless vehicles affect the Real Estate Business? How are the two aspects connected?
The first and foremost thing that people today look at while exploring real estate are the transit hubs. No one would like to stay in a place that is tucked far away from the business centres without any option to commute. The autonomous or driverless cars will erase the need to build a community around transit hubs and this would naturally bring down the value of a real estate business.
We are all aware of places in a country where the price of real estate had been low before the arrival of a transit hub near it. The close proximity of office and residential buildings make or break the value to be attached to a property in today’s world. A big transit infrastructure acts as a stimulus for the development of real estate. It has been the norm for so long that real estate entrepreneurs decide to develop their business on the basis of a transit hub present already or something that has the potential to develop a transit hub. Even the remotest of resorts are judged and made popular by the accessibility that it balances with its exotic location. But all that is going to change.
Let us look at the changes that might happen after the introduction of autonomous vehicles.
•Autonomous cars would encourage ride-sharing among commuters. This would keep people from buying cars
because of the convenience that these autonomous cars would provide. Traffic jam, parking spaces and high
maintenance cost of cars these reasons have always made people think twice before investing in a car.
Autonomous cars will add one more reason to the list making people choose driverless and safe commute rather
than have one’s own car. There will be a greater shift towards an inclination to access public or shared
transport rather than own a car.
•Secondly, there might be another trend that might grow with the rise of autonomous vehicles. People might
lose interest in transit hubs. Cost efficient self-driving can easily shift people’s interest away from
conventional public transport.
• Thirdly, when the world is filled with driverless public transport and private cars it is possible that
the real estate properties that had earlier seemed to be less alluring because of a lack of transit hub,
might suddenly become a valued property. This would naturally bring in higher values for the property.
It is also possible that areas that have been well connected might lose its value because of the
convenience that autonomous cars would provide to people. People might get used to the conveniences of an
autonomous vehicle and attach less importance to transit hubs and its relation to the value of a real
What about Commercial Real Estate Business?
Autonomous cars have the potential to pick up a user, drop him/her at a destination and again go back to where it came from. It can also park itself in a less prime area and make the need of finding a parking place less important to the user. Some cars would also be able to move on to pick the next customer after dropping off one.
A reduced need can have a mixed effect on the commercial real estate. Entrepreneurs who believe that they need to have a parking lot can save up financially. Parking lots define the value of a commercial place. The possibility of not needing any parking lot would naturally disrupt a lot in the real estate market. It might work differently with different entrepreneurs. The ones who were not doing well because of a lack of parking space would see the market open up for them. The entrepreneurs who were thriving because of the parking spaces will see a rise in competition in the market. But they can do a lot on the space that is left unused. It can also become a reason why people come to their commercial place. All they need to do is think ahead and think well.
The rise of autonomous vehicles seem to be very non-disruptive. But, it has the potential to disrupt everything on the business world. The effect that will be caused by this disruption must be watched out for. Real estate is something that no one would think would be disrupted by the emergence of these autonomous vehicles. But if you look into the details, the real estate market is going to be disrupted quite deeply. Entrepreneurs in the real estate world can prepare their business plans in a way that it can use the autonomous vehicles to their benefit. The only way to succeed in the business world is to keep oneself updated and evolve with the changes.