Urban properties may become of less value because of digitisation

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The value of urban properties has always been high due to large populations in urban areas, necessitating properties for accommodation and for working space. This value is therefore sustained and boosted by continuing rural-urban migration.

In the past, the migration of people into cities has been driven by mainly two factors; that there were unpleasant conditions in rural areas, and that cities presented superior conditions in many aspets even if some rural dwellers did not face any particularly unpleasant circumstances. As populations grew, jobs became scarce in rural areas.

Besides, rural jobs tended to be seasonal and intertwined with agricultural planting seasons. The urban environment provided more reliable and continuous jobs, and city developments created opportunities for employment of many people. Also, urban jobs generally paid more than rural farming jobs. The people thus shifted to cities in masses.

The urban job offering could accommodate the entire family’s hands since factories provided opportunities for men, women and children while those unable to take on factory jobs could as well be absorbed into the employ of domestic workers needed by rich families.

In many instances, cities provided better living conditions than rural areas and these conditions enticed more people to migrate. These came in form of better housing, electricity and other comforts of daily life.

Another factor that has always driven rural-urban migration is education. Cities and urban centers always provided better schools, colleges and universities. Indeed, a number of people can trace their initial migration into cities to points in their lives when they had to join better schools, or transit from high school to college or university.

All the above factors pulled dwellers into cities, and in turn rising populations caused more growth of these cities through supply of labor as well as market for goods and services that are in rich supply in cities.

However, the digitization age and the growth of the virtual world now seems to set in motion a trend in which all the above factors that have always spurred rural-urban migration will thin out with time.

For example, education does now not require the physical presence of students in a physical classroom to attend lessons and lectures. Someone staying in Kamdini, Northern Uganda, can attend a Swiss University online and successfully complete their course.

Pretty much, all teaching and learning could relocate from physical schools and happen online in years to come. This could become more practicable soon for many universities and other institutions of higher learning which conduct education for adults since the need for human contact between teachers and students is much less for adult students.

Lower level schools and institutions could follow suit at some point. In any case, the cost of running an online school will be cheaper than running a traditional bricks and mortar school.

The same will certainly apply to the office of the future. Even as of today, there are a number of organisations employing staff that the team leaders in such organisations have never met. They conduct all their business online and pursue their business without any need for physical interaction.

It thus not necessary for someone in Muhanga in Western Uganda to come to Kampala to be able to work for a company in Kampala. These cases will be very common with time. During the coronavirus crisis, as an example, companies have learnt to conduct board meetings and other key stakeholder engagement meetings online.

 It is cheaper and convenient for everyone. It is even beneficial for a clean environment and thus more sustainable for the world. It minimizes the use of modes of travel that are destructive to the environment such as automobiles and aircrafts.

With the above trends, investment in rural amenities for a comfortable life may get a boost. As people realize that they could run their businesses anywhere, investment in infrastructure and other business enablers might spread out to rural areas.

Even with the initial knock of coronavirus crisis, for example, the government of Uganda formed ideas of providing television sets and radios to facilitate rural schooling in remote mode. These trends may finally take root and advance to more impressive technologies.

For service-dominated economies like Uganda, the above trends will even be more acceptable. Remote service delivery is already more desirable than traditional services. Growth of urban populations could therefore lose momentum in years to come.

 Instead, we may have development of rural, scattered townships where people derive some of the services currently exclusive to cities. If that happens, demand for housing in cities will go down. The value of urban landed properties might then decline as might the return on investment in the said properties.

This will not happen in the short-term, but it is a high possibility in the long term.

Raymond can be contacted on rmugisha@afriaccent.com