Because Computers don't Buy Real Estate. . .

this core global industry could be in very troubled waters. 

Sample this:

"The second economy is responsible for the disappearance of many times more jobs than outsourcing to India or China. The truth is that we’re seeing a radical destruction of manufacturing jobs and administrative jobs, and some thought leaders suggest that the service economy is next, with the advent of waiter bots, receptionist bots, [drone pizza deliveries?] etc. There are far fewer paralegals, bookkeepers, telephone operators, or draftsmen than there used to be. They've been replaced by machines." - Bernard Marr. 

Here is a comment on Linkedin from Jeevan Deshpande, GM, Strategic Sourcing at Mahindra and Mahindra Ltd. 

"It is true and in fact we are moving towards fewer Human intervention. There won’t be much work for human beings. Self-driving cars will be commercially available by the end of this decade and will eventually displace human drivers— just as automobiles displaced the horse and buggy— and will eliminate the jobs of taxi, bus, and truck drivers. Even true for postmen and delivery people. If medications are needed, they can be prescribed based on a person’s genome rather than a one-size-fits-all basis as they are today. In other words, computers will be also taking over some of the jobs of our doctors, and we won’t need as many human doctors as we have today." 

Gulp. *Drinking Water*. Thanks Jeevan. 

With all kinds of human jobs disappearing into the second economy, demand for new homes, offices and retail spaces could soon dip and reach unheard of low levels. Maybe, we are feeling the loss of demand for real estate already but since the phenomenon is not really in our faces, we are baffled. If you ask a real estate biggie today about when a turn around in the market can be expected, the answer will be 'I have no clue."

Easier credit and an interest rate cut in housing finance may be a very temporary fix after all. There are much larger monsters lurking in those depths, threatening to wipe out the demand for new real estate.

Unless computers become self aware, have bank accounts and start buying property.

Right now, the numbers may look heartening. Right now, there may not be any noticeable drop in human employment. For a lot of industries, that is not a cause for alarm. However, for us real estate folks, it could be past the point of panic already because while old jobs (people who have been at it for some time, bought homes and leased offices) may not be disappearing, newer jobs are certainly not being created at a healthy enough rate. That is not good news for all the planned, announced and under construction real estate projects across the world, irrespective of the country.

Alek Zayas-Dorchak, an urban planner with a great vision, rightly points us to this simple, general need of the masses - "Who says we're going to sink? We don't HAVE to be on the cutting edge of everything. And we certainly don't HAVE to lower our wages. Why should a select few dictate the lives of the many? The vast majority of people just want to live comfortably with gainful, meaningful employment. Don't you realize this?"

There are two sides to every coin, and Scott Payton, Technical Director - Data Centers gives us the practical truth via his linkedin comment - "What many people fail to realize is that this cycle occurs frequently. And while there are some impacts short term, particularly in the 'labor' sector, ultimately it frees up human resource and capacity to pursue other items." 

Its weird but I also agree with Scott. And while the second economy is slated to overtake the primary economy in the near future in terms of financial size and does not require my agreement, it is also important to understand the phrase 'short term'. Short term for such transitions (for example massive employment to happen in the space travel or new planet colonization industries) could take three to five decades!

As a real estate professional ultimately dependent on the demand for property, I don't see how I could sustain myself and my family, even for a fraction of that 'short term', the way things are right now. 

While real estate struggles to get a better foothold and new jobs continue to elude us even as older ones die, one particular comment by Fatima Mohammad, a Project Development professional really spills out the common man's feel in her comment which I paste below - 

"Well looks like the Job Market is shrinking while the population is growing!! This is due to Man's desire to have everything done quickly and digitally! Most worrying factor is [that] the rate of unemployment is soaring even though the employable and educated sector is growing in population! [This] leaves many idle and idle mind is a Devils Workshop which then contributes to more problems as we note that Unhappiness leading to suicides, killings, abuse of every kind. Technology like this is contributing to the circle becoming more vicious and I don't believe this Killer is so silent anymore. I just pray that man can stop trying to reach for the stars without placing his foot on a solid foundation [first]. Technology is good if there is wisdom in it not if man wants to use it to control others and oppress them by removing them from the workplace. Scary how people have now become disposable." 

I will leave you with that profound thought. And since that headline up there is true, it will be interesting to see how things unfold in the short and long term for global real estate. What do you think? Use the comment box below and share your insights. I value them most. 

Cheers!

A sincere thanks to all the amazing people I met virtually on linkedin, who helped me put together this blog post. Weird isn't it?

About the author

Rahul Mishra is a real estate professional who started his life as a salesman, selling homes in the city of Kolkata since 2001. He worked pan India in real estate organisations like MMG Realty, Bengal Shrachi, The Phoenix Mills and The Space Group before helping co found Pillars with a single objective - To make real estate easy!

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