lundi 28 octobre 2013

Part 2: real estate, Global Warming and building cost

Specifically the Global Warming has some strong effects on the building cost. It is obvious too the changes have already started, the dates given by the GIEC (International Climate Experts Group) are simply an acceleration of a process already underway.

And these effects will be included in the definition of the raw materials and the topography of the areas where housing will have to be erected. For example the former need to have new properties in resistance and flexibility. Moreover the conception of heat protected homes (avoiding the costly polluted air-conditioning systems) to generate a natural warm family space for the cold winters is the consequence of the renewed mission for the architects and urbanists. 

Finally the cost might depend on the increasingly radical changes in the landscape. Detecting drinking water (an annual deficit of 2 billion cubic meters by 2050 is already stated in the South of France) but also anticipating rising water lead us to some dramatic measures such as the depopulation of some risky zones and the necessity to consolidate fields and living areas from these new dangers.

It is to be sure too ecological and environmental impacts have never been taken into account by the officials and the administration. It is noted unfortunately housing has never been the major preoccupations of the politics in the 70/80 decades, housing for them being to get a space to sleep and eat !

This remark is to be extended to all the western countries, the goal of each government having been to erect some vast living functional building simply divided with simple access to warm water and electricty. This conception of the city is outmoded today and need to be renewed regarding what we discussed about the environment including a rejuvinated harmony between citizens through the streets, the infrastructures and the administrative services. This is plainly a new vision of the city in the future being to be thought and this thinking should be based on the capacity for each one to buy for himself his own space.

At this stage of the lecture we need to go back to the structure of the price comprising the cost for the building and the mergin/profit for the builder/seller. 


The construction cost in the Eurozone for a 3 rooms apartment in 2013 is around 160,000€ and 180,000€ including the field’s price for an half of it. If i take into account the imperative to get an added value per year of 5%-8% you will have an asset around between 280,000 and 320,000 Euros in 2020 : I mean in this stement the real estate is perceived as a valuable asset depending not on the market trends but fundamentally from the need to be housed regarding a limited number of housing in a defined area and an unlimited number of people needing to live there (i take a standard constant rising of the growth rate per year as an average of 12 children for 1000 inhabitants).

jeudi 24 octobre 2013

Part 1: housing market, value, price and global warming  

The main feature of a housing market in France but in EU too is the difficulty to buy some spaces to be built. It is easily noted lot’s of law texts have been issued regarding the organization and protection of vast areas such as forests, fields, villages and cities. All around Europe, the builders take into account the transport infrastructures (mainly rail and highways) and the access to the public services through official documents by the city hall/ department/region administrations. The main consequence is the limited building capacity which has a strong impact on the value of the real estate.

First of all the value is based on the price of the plot. Beyond this first level some criterias such as environment and aesthetic qualities are added to get a full determination of the value of the good. Rarity is in fact organized by a sum of measures involving different elements taken from the current situation but from a short/mid-term future anticipations too. Plans are drawn by adminstrations in the big cities such as Paris to englobe for example 5000 housing/residencies on the Left Bank meaning 405 000m2 of shops and other services to be built.

All these elements out and inside the building are used to make an estimation of the price and this is this way the target for all good investors : whereas someone may view only wastelands or damaged structures, the serious buyer is keen to envision a vast modern ensemble at the center point of hyperspeed railway infrastructures, accessible shops, alleys and public offering services .

But let’s back on the problematic topic of the dual relation between the value and the price. 

All the elements I mentioned (plots, arounds, organization of the areas, different administrative measures) are fusioned into the building cost elaboration. This cost depends in fact from all these elements and not only raw materials or human factors and that’s why it seems very important to focus the analyses about the main change of the recent time: the global warming.

Global warming implies some notions such as ecology and protection of the environment. And we are aware today health, well-being and mobility are some new conditions to build properly!


Elaborated air filtration systems fixed in the common parts of any housing buildings, controlled quality water installations, noise optimized insulations, improved trash recycling solutions are being to ensure a better quality of life for each people too. Regarding the urban density growth, lifestyle diversification and intensive development of transport, the builders will be forced to encapsulate new parameters such as a closed harmony with nature and health: i mean the relation with the nature is dual and reciprocal. By protecting the environment with pollution limitation norms (gazoline, dioxides, trash of all sorts), we secure the counter-effects of the nature on us: avoiding catastrophies (flood, fires,etc) and epidemics should be considered as the first place!