Good morning, Indian real estate developers aren't the only ones buying grappling hooks to stay on the development ladder. Turns out, Singapore also has a serious housing problem.
Why: Singapore’s construction sector was largely shut for around two years because of a lack of manpower, though the industry started to recover in 2021. Supply chain bottlenecks also affected building materials, project timelines and without a doubt, housing prices, per CNN.
As a massive gap opens up between demand and supply, the brakes that the government policies were supposed to apply on the price hike seem to be cooking themselves to kingdom come, while prices continue to hike.
🏋️♂️🥚🍌
Opposite Always: China Goes For Residential REITs
The first batch of public residential REITs in China are launching soon.
While commercial REITs are the usual global picks, Beijing clearly believes in opposites.
Key Developments
1️⃣ The Shenzen and Shanghai stock exchanges are taking residential REIT applications.
2️⃣ Hotland Innovation Asset Management Co and CICC Fund have submitted theirs already.
3️⃣ Regulators are scaling up capital infusion to boost realty.
Future Possibilities
Bigger scope of REITs in China, covering commercial properties, logistics, infra, etc. That is IF Beijing allows it.
What it could do is widen funding for rental housing, making overall housing more affordable. If that happens, it would be a blessing indeed.
And China’s beleaguered property sector clearly needs it.
Inflation Halts Reviving Real Estate Juggernaut
Real estate is revving up again. Yet, developers are unable to capitalize on the new boom.
The spanner in the works? An average 40% increase in raw material prices.
How things stand
Take Gujarat for instance. 1,613 new project registrations in FY2021-22 and developers are grappling with rising construction costs.
Steel and cement alone have gone up by 40%, let alone labour and other heads. It’s the same story countrywide.
😬 Also: Factor in the last RBI repo rate hike and future ones on the cards.
Home loans will now be costlier while developers are forced to hike project prices alongside. Will demand suffer? It most certainly will.
Is there hope?
The Government has acted. But the effects will still take more time.
🧩 Till then, here’s a riddle- What’s common between developer-margins and wafers? They’re super-slim.
Forgive us for the levity. Dark times call for darker humour. And prayers for a better future.
Tuesday Treat
The great pyramids of Egypt are one of mankind's oldest and grandest construction projects, built with zero care for costs or inflation.
But how big is a pyramid anyway? Here's a perspective to help you figure that part out. 👀
Green Is Truly In For Indian Realty
Indian real estate projects are hugging trees and finally the right noises are being made, as net-zero projects become a reality.
Sustainable is coming to life
JLL’s study shows how 93% of occupiers agree on lowering carbon emissions, while 65% of investors prefer more sustainable cities. 57% occupiers have obtained green building certification, while 40% want to achieve the same by 2025.
Mahindra Lifespaces has rolled out Mahindra Eden net zero homes in Bangalore. The project’s got a plethora of smart features. It’s going to reduce energy demand by a third.
Mahindra is going all out with SRI paints, high-performance glass, efficient lighting, rainwater harvesting- the works.
👩🏽🤝👩🏻 They’re not alone; Max Estates is working on Max Square with IGBC Platinum certification goals. Godrej Construction has recycled 25,000+ metric tonnes of concrete debris too.
What the future holds
🍀 A bigger push towards sustainable and greener realty, as the last five-year cycle indicates. Certified buildings went up by 37%. That’s an addition of 78 million sq ft of green stock.
🍀 Sustainable office spaces have increased to 31% by September last year from 24% in 2011.
🍀 In fact, with certified housing stocks seeing 10.7% CAGR from 2011, green is clearly in for Indian real estate players.
While the shift at the developer end is inevitable, rising green home demand at the consumer end will truly make the difference.
After all, some premiums are worth paying, factoring in the bigger picture.
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Per this report, New York is battling a housing shortage, but there are thousands of vacant homes across the state that can be pressed into service to ease its affordability crisis.
One group has a solution to turn these so-called "zombie" homes into affordable housing by forcing banks to complete the foreclosure process and return the housing to liveable conditions.
More updates tomorrow. Good day. 💚
☕ The Crew@Ginger Chai