Methuselah, Transformative Technology and Alpha Cities

Methuselah was a biblical figure, best known for having lived an extraordinarily long life. Wikipedia suggests that Methuselah lived somewhere between 78 years and 97 years.
Today the above life expectancy is barely a “good innings”. Indeed the life expectancy of a female born in Australian today is around 84 years, while a male life expectancy is around 80 years.
All of which leads me to the concept of transformational technologies.
Today we sit on the cusp of a host of “transformational technologies”. From computing advances to medical treatments – technology is changing our lives in major ways, and those changes are only going to accelerate.
In terms of human longevity, the discovery of antibiotics was the transformational technology. In 1929, Alexander Fleming identified penicillin, and from that point onwards human life expectancies dramatically increased.
Another amazing new technology in development is “driverless vehicles”. In addition to Google a number of the major car companies, are currently trialing “autonomous cars”. I recently read an article that compared the development of these new cars to introduction of elevators in buildings. The technology is already here, but it is more a matter of consumers feeling confident with it. When elevators first came into existence they had to be “manned”, such was the level of consumer fear.
It’s not just planes, trains and automobiles … it’s all manner of scientific progress …. Environmental, medical, communication, construction etc
So what has this got to do with the Sydney property market?
Firstly it is clear that transformational technologies are having their greatest impact on big cities. That is not to say that technology isn’t having a big impact on rural areas, but it recognises that global cities, such as Sydney are where the biggest impact of technology is happening.
So while the main stream media seems to bang on with what seems like an endless drone of “doom and gloom”. I agree with Malcolm Turnbull when he says these are exciting times for Australia. Australian needs to “promote innovation, promote science, promote technology”.

Sydney is currently one of a small group of cities that is a global city or an alpha city. Only 2 cities (ie London and New York) have a higher rating, being an Alpha ++ (as opposed to Alpha +)
These Alpha cities are considered to be an important nodes in the global economic system. Global cities are by their nature are more expensive, wages are higher, opportunities greater, and they have greater concentrations of accumulated wealth.
So when the media suggests that Sydney property prices, are ripe for a fall, one needs to remember the global cities defy all the normal valuation rules.
I am not saying that price growth won’t moderate, as clearly 16% growth is an unsustainable rate. However Sydney is like a London or New York. Growth might moderate, but it will continue to defy what seems rational, as ultimately we are living in exciting times, with technology driving growth.
Danny Doff

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