New research undertaken by EY in association with the Property Council of Australia and the Green Building Council of Australia has identified the disruptive changes that will shape the property industry over the next 15 years.
EY interviewed 15 real estate CEOs and surveyed 550 property industry executives to build on EY’s global research on “The Upside of Disruption”. The executives were asked to assess the likelihood of the global megatrends identified by the global EY report as well as their own organisation’s preparedness for change.
EY asked the question: “Will the Australian property sector seize the upside of disruption” and identified six megatrends that will shape the industry:
EY Market Segment Leader for Real Estate, Doug Bain says, “Our research shows the real estate industry recognises the power of the disruptive forces at play. However, the EY Threat Matrix shows that there are areas around robotics, autonomous vehicles and big data that we believe have the potential to drive greater shock waves than is currently being anticipated”
“Innovation in property should not be restricted to digital and technology. It must be about all aspects of planning, delivery and operating assets. It includes funding and financing mechanisms, business processes, supplier management, community and stakeholder management, revenue generation and security.
“The industry needs to innovate and grow by asking five key questions in relation to the trends that will hit faster than many expect.
Ken Morrison, Chief Executive of the Property Council, says the Australian property industry is a world-leader in terms of innovation, design, sustainability and energy efficiency.
“Innovation is dramatically changing and the industry can’t take for granted the progress that has been made over many years.
“This change will only accelerate – drones will aid high rise construction, wearable cameras will enhance safety, sensors and 3D mapping will assess progress on building sites, and future owners will be able to ‘walk through’ a building using virtual reality. There is no area that will be immune from change.
“Disruption is occurring and will occur and it either means new entrants transforming the way the industry does business, or existing market participants anticipating and preparing for change.
“No one should think we are protected from change because people still need housing and offices. That belies the expectation that building processes will be transformed as will the way we buy and sell assets.
“The world’s population is growing with the global population reaching nine billion people by 2050, of which 70 per cent will live in our cities. Cities will be at the centre of transformation.
“Even our cities themselves will be transformed. We are only witnessing the start of greater densities, greater investments in transport infrastructure and a compelling focus on sustainability and liveability.
“One of the reasons we are passionate advocates for ‘city deals’ and the way we plan for infrastructure is because the way we manage cities, fund infrastructure and prepare for the future will fundamentally change. We have to be ready for that.”
Romilly Madew, Chief Executive Officer of the Green Building Council of Australia, says the Paris Agreement on climate change, the UN’s Sustainable Development Goals and rapid urbanisation are already disrupting the industry – but EY’s research has found that many companies within the industry are unprepared for the future.
“Green building was a disruptive force a decade ago, and Australia’s industry seized the opportunity. We are well placed to embrace the next wave of disruption to drive greater efficiencies in energy and material usage, to enhance the resilience and liveability of our growing cities, and to deliver homes and workplaces that are more sustainable, as well as smarter and safer.”
“Australia has led the world on sustainability and we must continue to do so – and that requires continual innovation and a commitment to challenging business-as-usual thinking,” Ms Madew concludes.