☕ Green is shady

Good morning, when it comes to climate change, Norway is like a teetotaller who owns the biggest whiskey collection in town. 

While generous government subsidies ensure that 70% of all new cars sold there are electric, oil and gas remain its most important industry, accounting for 40% of its exports. 

The real estate sector behaves similarly when it comes to the green stuff, you'll find out as you read along. You'll also find some cheerful news from the insurance sector, for a change. 

It's a busy week and we will try and bring to you all the important updates as it progresses. 

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LEGAL


Friends And Covers

In order to respond to the requirements of real estate developers and retail property buyers, IRDAI (Insurance Regulatory and Development Authority of India) has instructed general insurance companies to launch title insurance products

Wait, Wait. Title Insurance?

Yes. It's a form of indemnity (security or protection against a loss or other financial burden) insurance that safeguards a property buyer against financial losses arising from defects in title to real property.

Such a policy is retrospective, meaning the insured is protected against losses arising from shady events that occurred prior to the date of the policy's issue. Health insurance folks - hint, hint.

And Who Needs This?

In India, practically anyone buying immovable property. This new Title Insurance can provide cover to real estate developers - who can opt for a minimum legal defence cost, and retail buyers (individuals and financiers) at the time of possession of the property - for financial protection against any future legal suits.

FYI, there are a few existing title insurance products in the Indian market, but IRDAI has added to them a new and badly needed clause.

Taking into account the need for legal protection for developers in the early stages of development of a project and safeguarding the interests of the buyers, there was a need to expand the current title insurance products to cover all stakeholders in the built eco system.

The Coolest Part

Title Insurance cover can soon be individually bought by property buying customers for a desired duration, which was earlier available for eternal time periods only, translating into more peace of mind at a reasonable cost. 

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ENVIRONMENT


Shady Green Credentials

Ever wondered what is common to the real estate and the automobile industries? 

Post purchase trauma? No.

Carbon emissions, aka pollution. Yes, real estate has one of the highest carbon footprints of any sector. As you read this email, the sector is contributing 30% of global annual greenhouse gas (GHG) emissions, while consuming around 40% of the world’s energy, per the UN Environmental Programme. 

Self-regulated Environmental Standards

Globally, real estate neither seems to be regulating its emissions, nor paving a pathway to net zero in any coordinated manner whatsoever. Essentially, its a free-for-all.

If you analyse the latest project launches, you will know that most environment concerns shown in the project brochure (if any at all) are mostly hollow promises. Add to that real estate companies that are focused on metrics of their choosing in an attempt to claim they are making a positive environmental impact.

Operational and Embodied Carbon

Read the available sustainability policies of real estate companies and the focus is always on ‘operational’ carbon rather than on the ‘embodied’ carbon. This is the highway your mother told you to avoid at all cost.

Operational Carbon - Emitted during the daily usage of a property, from actions such as taking the elevator, lighting and air conditioning.

Embodied Carbon - Emissions created during the manufacturing of materials required to construct the property. The key components of any construction in India are concrete and steel, both of which produce significant carbon emissions.

Embodied carbon is expected to represent 74% of total emissions from new buildings between 2020 and 2030 and 49% of the total emissions between 2020 and 2050, per the UN report. 

Also note that this ratio is only going to increase as the energy grid becomes increasingly decarbonised with the rise of renewable energy sources like wind and solar power.

What Then?

A few ideas are doing the rounds, like doing a necessity test before constructing new real estate to see if it is really important to build it, or refurbishing old buildings in city centres using modern restoration techniques to reduce the use of concrete and steel.

Ideally, the most sustainable and green building is the one that is never built. 

Till then, we can only hope that just like BS-VI (Bharat 6 emission norms) had auto manufacturers scurrying to fall in line, we enforce emission norms for construction before it's too late. 

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ARTIFICIAL INTELLIGENCE


Ai Ai Captain

Artificial Intelligence (AI) is truly about technology that can draw logical conclusions and learn on its own. 

In Indian real estate today, AI is nearer to advanced machine learning with simple-to-complex algorithms that process large amounts of data/ user behaviour to make accurate, near-term predictions.

Machine Learning (ML) is already helping Indian agents and brokers respond faster to clients’ questions, improving property discovery, matchmaking and assisting real estate entities in marketing their listings with more accuracy.

However, the transition to AI has already begun and could well define the future of Indian real estate, experts believe.

5 Ways AI and ML are changing Indian Real Estate

Improving Home Search Accuracy- Machine learning has made home searches easier by analysing a consumer’s search patterns and offering a more accurate result based on what they really want. On the other hand, AI applications are serving as chat interfaces with customers to answer simple and complex questions, such as “is this 40-storeyed tower approved by all authorities?”

Validating Genuine Clients – Systems today utilize Natural Language Processing (NLP) and other stuff to isolate high value touchpoints from low value ones to identify clients who are more engaged with the agent. This helps specialty agents, like a local or community expert, narrow down to serious clients and close deals faster.

Filling Demand Gaps - AI and ML can provide deep analysis of a market and show where current demand is underserved, growing or strong. Real estate firms can move confidently into those areas by hiring local experts.

Refining Consumer Experience – Simply by delivering faster closing times, smarter mobile apps, online compliance checks, real time reporting and pre-filled data to reduce manual entry and errors.

Improving Predictions - By combining open marketplace and internal CRM data, AI technology could help real estate players better predict the future value of a home in a specific micro-market.

Because Indians always see a home purchase as an investment, a reliable forecast of their investment’s future value can enable them to make a buying decision with much more confidence.

That’s two ayes.

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HALF A CUP EXTRA
  • All rise and 👏👏. The Ulhasnagar Municipal Corporation (UMC) in Maharashtra charges 73.5% tax on rental properties - the highest anywhere. The Congress has threatened to go on an indefinite hunger strike against the UMC, if this tax is not revised/abolished. 
  • All high rising eyesores behind the Taj Mahal - buildings, high-tension electric poles and mobile towers are now a strict no-no. In addition, all such existing structures are being demolished or being reduced to heights below 25 metres to improve the background. 
  • Completely unlike the prediction we read about in yesterday's Chai, Forbes has put out 11 predictions for the real estate sector. Point of note? Though these predictions are for the US market, so much of it rings true for India and other countries as well. 
  • The successful completion of the approved resolution process of Reliance Commercial Finance and Reliance Home Finance will help Reliance Capital reduce its debt by half or INR 20,000 crore, Anil Ambani said.
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TIME WILL LAPSE


This time lapse, shot from 2011 to 2014 follows the construction of the One World Trade Center, the sixth tallest building in the world then. Photographer Benjamin Rosamond's 2-minute original video is a treat to watch. 

More treats tomorrow. 

☕ The Crew@Ginger Chai

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