The real estate industry and the local economy are always intertwined. When the local real estate is thriving, it is usually an indication that the local economy is doing well. While real estate is, in many ways, a traditional business model; it cannot thrive without the interconnected network that must come together to bring the global marketplace to the local market.
The property market is one of the oldest industries in the world. In cities, in particular, we pay significantly more for significantly less. So why do people choose to move to these crowded cities where everything is significantly more expensive? Doesn’t it go against all logic? Why not live in the countryside where everything is cheaper and life is ‘better’?
Urbanisation, like globalisation (and many other ‘ations’), is not a new fad or a fun buzzword. We have been congregating in cities because we must. The move from rural to urban is, for the most part, seen as a marker of progress and development–but the reverse is not true; at least in economic terms.
Cities define our economic, social and even cultural status. And cities are not all alike–each has its own character and attracts a certain archetype. City planners, for instance, plan way ahead on how they can compete to attract the talent and the investments that are in line with their strategic goals.
At the heart of our cities is real estate–the largest asset class on the globe and the main holder of our personal and institutional wealth. Logically, it actually does not make sense that real estate in cities costs so much more. It is human demand and supply that is behind the real estate busts and booms–and of course, government policy and planning as well as business interests.
Real estate is far too important to society as a whole for it to be subject to poor policy and planning as well as speculation and lending practises which trigger volatility in valuation. With real estate development comes responsibility to create liveable places for people that also improve the environmental, social and economic realities of the communities in which we are all a part.
Only through this approach are long-term investment returns–both tangible and intangible–sustainably generated.