[mmrasheed]

I am fascinated by their construction technique, which is nothing but perfection of management. I was eagerly waiting to see the proposed 220 story, 850 m tall building construction in seven months since 2012, but that plan was halted due to continuous rejection by the authorities and the engineering communities.

I am not a civil engineer, so I can't criticize their construction method. But I wonder if it is traditional civil engineering community's prejudice, or fear of being swept away by any revolutionary technology that keeps them opposing this sort of construction technique?

[jychang]

It's a mix of both.

A 220 story building would be an engineering marvel, and at the same time not a threat to civil engineers. The bread and butter for engineers are much smaller buildings, which are less technically challenging and acceptable for new construction techniques to be tested out on. You would expect to see a lot more civil engineering resistance on the smaller targets, not the biggest ones. The biggest issue facing such a monster building is the safety of even going that high, considering wind shear, earthquake risks, etc.

[brudgers]

Development projects stall for many reasons among them are modifications of the developer's pro forma that reduce the viability of a project - interest rates go up, the cost of construction goes up, rents go down, local occupancy rates dip, etc. etc. The technology has the potential for some small incremental change to the real-estate development process, but it doesn't alter the underlying market forces where a housing shortage of 3000 dwellings is identified and twelve developers each throw up a "coming in 2017" signboard on some piece of land for an 1800 dwelling project. It's not enough to be out front of the pack with construction, what really matters is business intelligence.

Which is a round about way of suggesting that despite bureaucracy and resistance from entrenched traditions, that real-estate development ideas are much like startups: most run out of money and are worth zero. Unlike startups, the upper bound on profit is low, but their potential persists owing to the real nature of real property - land doesn't go anywhere.

[minthd]

Can't these kinds of buildings change the dynamic in real-estate ?

For example , in israel, where the land is usually bought from the state, sometimes groups of private people gather together to build an apartment complex and save a bit of money.But that's a long(and maybe risky) project, so people rarely do so.

But let's say it was a short process - a group gathers, gives the funds , and in month they enter their apartments. I could see this becoming more common, because you can have decent savings .

And assuming that happens - now it's people buying their own land(and build higher structures on it), won't that change the pricing dynamic on land, and the political pressures on the state which sells such land ?

[brudgers]

Real-estate markets are markets. They seek equilibrium. When a building is delivered, supply increases, demand goes down and a new equilibrium is established. Groups of people who would build apartments have the option of moving in to existing apartments without the impedance of land entitlement, large project financing, or construction timelines. Speed to market presents less risk to developers except when everyone else can get to market just as fast. Then the risk that someone else delivers and the market becomes over-supplied comes back.

[minthd]

How can it be that there's a risk of over-supply if times gets short and feedback loops between buyers/contractors/sellers become much faster ?