Flow Or No Flow, Property Is Changing
News broke last week that controversial entrepreneur, Adam Neumann, having been ousted from WeWork, would be returning to the property sector with a new venture. It’s called “Flow”, and not much is known about it, other than it is billing itself as a “community-driven” rental startup.
In a report on The Guardian, one of Newmann’s investors, Marc Andreesen, gave us all a hint of what to expect – essentially “dorms for adults.”
“Many people will live in places far away from where they work and many more will shift to a hybrid environment,” he said.
“As a result, they will experience much less, if any, of the in-office social bonding and friendships that local workers enjoy.
“For many of these people, increased screen time and reduced in-person interaction will cause challenges that are not just limited to work, such as alienation and loneliness. This is not a good path for anyone and it needs to be addressed directly, right now.”
There are, of course, big questions about what impact, if anything, Flow will have in Australia. Is there scope for a “dorms for adults” approach to property in Australia? How we’re living, working and interacting in Australia is shifting, and Newmann, despite the controversies, is a big, bold and innovative thinker, so might Flow be something to watch here?
Whatever the case might be in that regard – and we’re certainly not going to make predictions here – There are a couple of learnings we can take away from how Neumann is thinking about life, work, and the integration of the two. For property buyers and investors in Australia, there are some useful thoughts here.
The tides are shifting
What has been happening to the CBDs across Australia is an extreme example of the shifts we’re seeing in people’s lifestyles and movements. As far back as 2020, the headlines were proclaiming that “COVID has all but killed the Australian CBD”, as cafes, restaurants, and service businesses struggled with the simple fact that people were no longer commuting into the office. Just this week, with the Queensland Government again recommending public employees stay home, the Brisbane CBD has “gone silent”.
Around 40 per cent of Australians will continue to work from home at least some of the time into the indefinite future. While the CBDs might be able to recover to a point of sustainability, their impact as a hub for the Australian economy has been permanently diminished, and that will affect the long-term value of properties and investments in those areas.
Instead, people will see opportunity in the national broadband infrastructure (NBN) and being untethered from their desks to live where they want to. Those parts of Australia that are aesthetically beautiful or lifestyle-orientated can probably expect long-term growth that outpaces the rest of the nation. This will be for both regional Australia and the cities.
However, people will continue to want to interact, collaborate, and work together. This means that their place of employment will keep its own offices (even if it downsizes them a little) to allow for the commute to work when the employee wants to.
It’s also where Neumann’s idea for Flow would seem to come in. Whether people want to live and work in such a structure and “dorm”-like proximity is debatable, but there will be increased demand for co-working spaces and rental offices for those who do work remotely but want to be able to access the office environment.
This will have the flow-on effect of encouraging further local growth, with cafes and restaurants serving the local business communities, and that will help boost the value of commercial real estate across the country.
Neumann’s business is called “Flow”, and that’s a good term for what’s happening in populations now. People are “flowing” into new lifestyles, and while that means there are some that have been affected by the movements (CBDs), the money and people aren’t gone. They’re just being redistributed.
So, if you’re looking to buy property, doing your research to understand the trends is critical. You must focus on how the shifting populations might affect the area (and therefore the property prices), as it is going to be even more important in determining the long-term value of the property.
Hello Haus’ Get Buyer Ready course can help you prepare for these changes and research with confidence. Click here for more information.