Sydney to Melbourne in just 55 minutes.
No check-ins. No weather delays. No flight cancellations.
Because this isn’t a flight. It’s a train ride.
Well, sort of…but not really
You see, it’s another one of Elon Musk’s pet projects.
You’ve probably heard of Musk. He’s the guy behind Tesla, Inc. [NASDAQ:TSLA] and SpaceX. This bloke is the face of cutting-edge technology, and is the inspiration behind the Ironman films’ Tony Stark.
A sort of billionaire playboy with a penchant for high-tech gadgets.
And he’s also the founder of Hyperloop, a company whose motto is ‘Be anywhere, move everything, connect everyone.’
So what is Hyperloop?
I can only describe Hyperloop as a sort of rocket in a tunnel. It uses magnetic levitation within specially constructed low-pressure tunnels to glide shuttles long distances with low aerodynamic drag.
A system of electric propulsion propels tubes filled with passengers fast. Very fast.
It’s capable of speeds up to 1,000kms per hour…hypothetically, at least.
The technology is still in development. But testing has begun, and the company is looking for initial launch sites.
Sydney to Melbourne is a hot contender to be in the running as an initial launch site for Hyperloop. It’s got the numbers and dollars to be an attractive option commercially. In fact, the route is the third busiest air corridor in the world.
Imagine it. A commute that takes less than an hour. I reckon that’s faster than a rush-hour drive from Doncaster, a suburb in Melbourne, to Melbourne’s CBD. And I’ve heard Sydney’s traffic is even worse.
This reality might not be as far away as you think.
Alan James, Vice President of Hyperloop, said in June: ‘This is not a ten years away story. This is not a five years away story. And literally months from now, the world will be able to see, touch and smell an operational Hyperloop.’
Since the comment, Hyperloop’s Nevada testing site is up and running, and test runs are proceeding at an impressive pace.
If and when it eventually becomes a consumer reality, it will signal a massive shift in human behaviour.
A daily commute from Sydney to Melbourne will be feasible. I know some ‘high flyers’ already do this on planes. But this really opens it up to the rest of us.
It’s just a small part of a technological revolution slowly creeping into modern life. And it could be game-changing.
Technological advances in energy generation and communications technology are combining with freelancing, outsourcing, contracting and the ‘gig’ economy to create new ways of working.
These changes are making it a lot less important where you work.
For instance, in my position, I work a couple of days per week from home. Some of my colleagues work from the UK. My wife does freelance graphic design work from a home office.
There are even so-called digitally autonomous organisations (DAOs). These combine users from all over the world who share skills to forward specific goals, businesses or ideas.
It’s becoming more common for businesses to accept and even promote such practices.
Flexible working and technology are coming together to change the way new generations of workers earn a living.
Which got me thinking…
What if where you live starts to become a lot less important in relation to where you work in the future?
The potential impact on Australian property prices in Sydney and Melbourne
The decision on where to live comes with a whole host of issues.
Affordability, access to public services, amenities, schools, whether to rent or buy…plus many more nuanced individual considerations.
But affordability and proximity to work are two of the main factors. In the past, that’s why European migrants coming to Australia in the 1960s settled in inner cities — working class suburbs close to the factories that employed many of them.
Today, those same suburbs are in demand for a different reason — their proximity to the CBD. Where many of the new generation earn their crust in the services and office based economies. Not to mention the availability of hip bars and restaurants…
And prices have sky-rocketed because of this.
Now, let’s say five to 10 years from now your choice of feasible living locations increases massively. Maybe it’s Hyperloop, or virtual reality and communications technology, or even the creation of more jobs that don’t require physical presence…
Maybe the lure of the big city is stronger than just work? Maybe this technology will only have marginal effects?
I can’t say for sure.
But I personally think that the sky-high property prices in Australia are providing an impetus for younger generations to look seriously at their options.
And a decade from now, the appeal of some of these current in-demand suburbs might not be as strong as it is now.
In short, this technology could have a very strange effect on future Australian property prices.
Editor, Money Morning