How telecommuting – or 'work shifting' – is changing Australia's property markets
“Work shifting” is a bit of a buzzword in the technology sector. Many software companies are getting on board with it and providing the tools to employees to be able to work remotely in a much easier fashion than ever before. But it is a trend that few are talking about yet in residential investment property circles. However, I think it is very much worth discussing so we can identify trends that could implicate property supply and demand in the next 10 years – or even within the next five.
Having worked in the technology media industry for almost five years, I’ve observed a noticeable sharp increase in the volume of technology solutions providers that are releasing products and solutions that all work as a variety of cogs or pieces in the puzzle of providing secure, fast, and innovative remote-working solutions. This ranges from high definition online meeting software providers to online security and threat-prevention companies offering solutions to protect networks for mobile or work-shifting staff to networking solution providers interested in making sure that mainframe data is accessible, quick to access, and reliable.
Work-shifting is really just a phrase coined to identify the process of being able to work remotely with greater ease, thanks to some of the abovementioned innovations. It goes by many names in business – ‘teleworking’, ‘mobile working’, ‘remote working’, ‘home office based’ – but it all pretty much means the same thing. Technological advancement is making it a lot easier to do many jobs from home.
While working from home is certainly not a new thing, there has until recently always been a need to live close to the physical workplace so you could go in whenever you needed to, because technology was not yet advanced enough to work efficiently from home. But now you are able to take business meetings in real time high-definition video while showing your PowerPoint screen to other users; you can also wirelessly access private networks and pull data from them, at (what will be with the pending implementation of the NBN) ridiculously fast speeds.
What this means is that for a great number of white-collar (and increasing volumes of traditionally blue-collar) jobs, the need to go in to a physical workplace is being continually minimised. The advent of online meeting software providers, Skype, remote working, CRM systems and high-definition high-speed video connections means that more and more Australians are holding jobs where they never need to physically need to leave their homes. Even for a face-to-face meeting.
So where am I going with all this and how does it affect residential property investment in Australia? I’ve been observing trends in Europe, North America and Japan, over the past few months – all markets that are at the forefront of the work-shifting trend – and there have been visible changes noted to demand for housing in areas further away from large metropolitan cities, by demographics that are quite clearly working professionals.
It seems some people who can work from home are choosing not to live in large cities. What has also become apparent (particularly in the UK and Japan) is people now moving to areas that are an hour or two’s drive from a big city, possibly to enjoy the quieter lifestyle that these locations may offer with comparison to overcrowded, expensive, and congested larger metropolitan cities.
Think about this for a moment and ask yourself: regardless of whether you are a city dweller or live in a regional remote town: if you could have that big city job with the great salary, career progression path, employer etc. that you desire yet not have to live in a more expensive, traffic-jammed and stressful city, would you? If you could be sales manager of say Melbourne’s largest “X” company in “Y” industry and you did not have to commute two hours a day to an office, pay more for your groceries, your rent and your travel costs, yet still earn the same wage, would you nominate to work-shift?
Metropolitan living remains highly desirable for many city dwellers, and by no means am I challenging this notion, but I am guessing a sizeable number of people would rather live on the coast or in regional areas if they could.
One of the clients at my work place is very senior in a large global technology company, yet she actually lives and tele-works from the beach in Cairns. I called her one day and asked what motivated her change of location. She said that she could work remotely/online most of the time, taking meetings in high0definition video and sharing data remotely, yet had all of the lifestyle benefits of living in Cairns.
I asked her what these were. She said there were many – lower cost of living, she actually has a backyard now (something she’s never had in her adult life), holidaying in south-east Asia becomes closer and easier, and she scuba dives regularly on the weekend. Her mortgage is half the cost of her once inner-Melbourne shoebox, yet she lives right on the beach shore and she’s able to condense her physical meetings to one week per quarter of back-to-back meetings in Sydney and Melbourne.
My personal prediction and belief is that we will follow the trends emerging in other countries, whereby “lifestyle” locations that are near to larger cities (say, a couple of hours’ drive) could benefit most from this trend. Professional have the benefit of being a close commute to friends and relatives in the city, while also having that beachside house and relaxed small-town vibe in their day-to-day lives.
It is certainly too early to advocate any kind of mass acquisition of regional investment property, but rather it is early enough to earmark some locations where this trend is emerging and observe if any significant demographic shifts occur in these locations. One big question this does encourage, however, is the level and degree of capital gain and/or rental return achievable for these locations. Will the “new” tree-changers and sea-changers pay handsomely to rent your property in a sleepy beachside town, where they can work remotely while still earning those big-city bucks? That is the question that should be pressing most investors reading this today. One to watch.
Cameron McEvoy is a NSW-based property investor and maintains a blog, Property Spectator.