A Hypothetical Vision of What the Property Sector in the Future Might Look Like - Bonnie O. Wong
The mess with the global financial and property markets may have been fuelled by two misguided beliefs. One, that money is an end. And two, that property can reliably provide a continuing source of income and that it is an enduring asset that can be leveraged. The future requires redressing of these beliefs and a re-boot of the financial and property markets.
In the future, we remind ourselves that money is not an end, but rather a means to exchange, make, and do things. It is merely a common currency or a language with which we may estimate value, but by no means fully captures the feelings and outcomes associated with the things and experiences to which we try to ascribe a value.
But I turn your attention to property, which people have, through the centuries, often related to money, but also power and control of resources. Traditional economic models do not always hold true in the property market. Some property owners are willing to leave their properties empty and let them decay, rather than circumvent further losses by adjusting their asking prices downward in order to successfully sell or rent them. High demand for property has not led to increases of supply nor to failing prices. Perhaps it is because the supply of land and the supply of materials with which we may construct buildings on land – steel, concrete, silicon, clay bricks and mortar – are finite. However, we can adapt our attitudes and approaches, by re-using existing materials, using renewable building materials, or inventing new materials. More critically, property is static - higher demand in one location cannot simply be satisfied by supply located 50 miles away.
If we are to protect property, its future requires a shift in beliefs and assumptions from one of ownership to one of stewardship. We would no longer assert that property is a source of perpetually rising values and continuous income streams. Price speculation is replaced by compassion for other other people and understanding others' needs for adequate shelter and social connection. Unbridled development for the sake of private profits is replaced by the understanding that we are simply renters benefiting from a very, very long leasehold of planet Earth. We pay not even a peppercorn rent, yet we are costing the Earth.
The future I imagine is one where we may sensitively build on land to provide for others as well as ourselves. Property has value where people want to live, work, or play and in the future private property investors realise that there is social and environmental value to voluntarily transferring surplus land to sustainable community development and the construction and perpetuation of affordable housing, affordable workspace, and public green space. We will invest in property, not to get rich quick and become tycoons, but rather to support lives and livelihoods. In the future, we will be good stewards of property.