Driven by advancements in artificial intelligence (AI) and machine learning, self-driving vehicles show great promise in marking a serious dent in the transport sector of the future. By 2025, the global market value of partially autonomous vehicles is expected to reach a whopping $36 billion. This is of no surprise, as autonomous transportation presents several advantages over conventional vehicles, such as safer and more efficient road use.
Transit is the backbone of several industrial and commercial enterprises. So, how will this looming revolution in personal and mass mobility affect the real estate industry? Let’s look at two important areas.
The cost of construction and turnover will reduce
Perhaps the most critical aspect to explore is how self-driving transport will affect the prices of property. Since driverless vehicles are expected to cut down the cost of transportation, maintenance and staff wages, significantly, construction costs will go down in turn. This is good news for property developers and future homeowners. Besides, the reduced building cost will incentivise development and construction in barren areas; opening up new neighbourhoods and housing options.
Availability and accessibility of transportation facilities are significant determinants of the choice of residence. With the convenience of driverless vehicles, commuters and other urban residents will retain their urban homes for an extended period. What this means is that retirees and senior citizens will not need to turn over their houses once they are unable to drive to urban amenities. Due to this reduced property turnover, urban centres will experience a rise in population and consequently a hike in lease and rent prices.
Redefined real estate valuing factors
Driverless cars are likely to redefine the elements that give a property its value. For instance, most will be electric or hybrids, so a gas fuelling station near a home will not be much use, whereas EV smart home charging stations will increase values significantly. If current navigation systems lead into later generations of autonomous technology through the likes of IoT sensors, then real estate in areas with reliable GPS and emerging 5G data coverage will increase in demand and therefore value.
This will undoubtedly reshape several industries, and clearly, the real estate industry is no exception. However, although tentative, all this is yet to come. Autonomous vehicles still have a long way to go before they hit the mainstream market.