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by brudgers
4021 days ago
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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. |
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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 ?