Trends

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Print-a-house

Up till now, the big news for 3D printing has been about small things. 3D printers can make multipart assemblies as one piece, meaning manufacture is quicker and cheaper and there’s less to go wrong. You can 3D print new organs, or 3D print parts of a home, stick them together and then build the whole thing from prefabricated pieces. So far, in housing, 3D printing has changed things – but it’s never been a game-changer.

That Was Until Now

The latest development in 3D printing is the construction of enormous 3D printers that can print large structures as one single piece. The technology, called ‘Contour Crafting,’ is already here: test models can build 2, 500 square foot homes in about 20 hours.

The huge robot printer responsible for this feat was invented by the University of Southern California’s Professor Behrokh Khoshnevis, who says that technology is more or less infinitely versatile. We can build suburbs, clear slums – and if we can get it to mars, we can build habitats there with the same equipment.

Professor Khoshnevis says extraterrestrial applications of his invention have received interest and supportive noises from NASA, which foresees using the tech to build homes, labs and roads on Mars or the Moon.

While it might be a stretch to imagine a whole house simply printed off – and in some ways it seems to devalue the idea of a home – Professor Khoshnevis says he expects that the technology will make houses more, not less, individual: your house doesn’t ‘have to look like tract houses because all you have to do is change the computer program. The walls do not have to be linear. They can use any kind of curve. Therefore, you can really execute very exotic beautiful architectural features without incurring extra cost.’

The giant robot printer can also tile the floors, install plumbing, install electrical wiring and can even apply paint or wallpaper.

All of which sounds idyllic, and it certainly is one way the technology could be used. Over in China, meanwhile, another approach is being showcased.

In Shanghai, WingSun Decoration Engineering Design built 10 homes in Shanghai using equipment similar to the Contour Crafting gear designed by Professor Khoshnevis.

After buying parts for the machinery overseas, the company assembled them in China and used them to build 10 small, one-story houses in Shanghai in just 24 hours, a huge improvement on existing construction techniques in terms of time and money. However, there weren’t any great strides forward in architecture.

So where is 3D printing as a building technology really heading?

‘It is an interesting technology,’ opines Derrick Morris, director of construction technologies for Habitat for Humanity in an interview with online tech magazine Mashable. ‘We’ve been watching this with some interest over the past couple of years. A lot of the time, it’s more about changing the mind of the consumer.’

Rather than being rush-and-hurry cookie-cutter buildings or endlessly variable hand-Contour-Crafted creations, 3D printed houses are likely to simply become another part of the urban landscape, not totally replacing existing building technologies but getting a foothold in building skyscrapers and apartment blocks as well as suburban homes. How much control consumers will have is open to debate too: Professor Khoshnevis invites you to ‘imagine a Contour Crafting machine for lease at your local Home Depot.’

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Hong Kong is one of the most competitive real estate markets on earth.  Financial Secretary John Tsang told the New York Times that property prices had risen by 120% since 2008.  Obviously, that hasn’t been matched by an increase in income anywhere, let alone in Hong Kong, so while expatriates might be in a stronger buying position than natives, they are still priced out of the market.  If you want a Hong Kong apartment, you don’t stand a ghost of a chance – unless you’re willing to share with a ghost.

That’s because Hong Kong’s residents are Chinese enough to share that country’s abiding fear of the supernatural.  Where else in the world is there a word for ‘a house haunted by the ghost of a former resident, who has died an unnatural death’?

In Hong Kong, though, ‘hongza’ means just that.  Hongza sell for significantly less on the open market, and one Hong Kong business, Ng Goon Lau, has made a career and a modest fortune, in buying hongza at a discount and letting or reselling, often to expatriates desperate for accommodation and less superstitious than Hong Kong natives.

That’s not hard.  Other cultures have two-or three day festivities, or a Day of the Dead; in Hong Kong, an entire month is devoted to the Hungry Ghost Festival.  Every summer, spirits are believed to visit the city and need to be fed and entertained.  The city’s main daily English-language paper, the South China Morning Post, even hired monks to cleanse the newsroom after staffers reported seeing ghosts in the bathroom.  According to Niall Fraser, deputy news editor at the paper, ‘everybody seemed quite happy’ with the result, and the ritual ‘seemed to do the trick’ – the ghosts weren’t seen again.

As a measure of the difference that ghosts can make to Hong Kong people, it’s convincing.  But more convincing still are the figures.  Mr. Ng said that he usually expected a ‘death discount’ of 15-20%, less if the property was merely adjacent to a funeral home or cemetery, more if a previous occupant had died there in suspicious circumstances.  He said the discount could go as high as 33%, a dramatic reduction that assured Mr. Ng a healthy profit margin for several years.

Mr. Ng started in the hongza business when a workman working on Mr. Ng’s own house was killed in an accident.  Since that time, he’s segued from his old business, shark fin sales, into the newly profitable haunted-house business.  And one thing that helped him was the cash from his old business.  Most Hong Kong banks share the same superstitions as the general population and won’t offer any kind of mortgage on hongza.

But there’s been a sharp reduction in his profit margins recently.  Mr Ng is shocked: the death discount has dropped to as little as 5%, cutting deeply into his profit margins.  The inroads made by other agencies spotting a profitable market, together with the pressure on prices from the market at large, has meant that Mr. Ng was able to purchase only one hongza in 2012.  ‘The market is crazy now,’ Mr. Ng says.

The upside is that Mr. Ng, though he must pay more for hongza now, can ask his tenants or buyers to do the same.  He hopes to rent hongza at market value now, and expects to continue to make a profit on his haunted houses: ‘they’re still more profitable than shark’s fins,’ he says.

It seems the only thing that can drive Hong Kong people out of a property is ghosts – and the only thing that can drive out the ghosts is a boom!

Photo credits: Timothy via Flickr

 

 

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A row of London homes

For years, the property market in London was buoyed up by investment by foreign buyers, who regarded the city as a safe place to put their money during the financial turmoil following the 2008 crash.  But now, the city faces the threat of a bubble, according to Ben Habib, Chief Executive of First Property Group.

Between mid-2009 and the end of 2012, office space in London rose in price by 52%, and the luxury residential market grew at a similar pace.  According to the research group Real Capital Analyticals, commercial property deals reached nearly £21bn last year, and over 64% of the money coming into the market was from abroad, a rise from 61% in 2011 and 55% in 2010.

Amid fears of a breakup of the Eurozone and tax rises in the US, together with spending cuts and economic slowdown in China, the flow of money into London has slowed as concerns over the British economy have grown.

Britain’s economy shrank in the final quarter of 2012, and the country’s AAA credit rating could be in danger too.  The pound is weaker against the dollar than it has been for six months and that could make London a less welcoming investment environment.  As Jeffries real estate analyst Mike Prew puts it, ‘ prime London asset denominated in a secondary currency loses much of its investment appeal.’

Investment appeal is also divided between investors who are looking towards capital preservation, and investors whose concern is rental yield.  While the London market ha functioned well in terms of capital preservation its yields remain relatively low.  The West End market as a whole yields at about 5%, but some Mayfair properties yield under 4% and that figure is closer to 3% for some luxury developments.

The luxury residential market is suffering a hiatus as the effects of economic downturn percolate.  Several banks have made job cuts, leading to worries about demand strength, and some buildings are starting to drop rents to meet reduced demand.

It’s likely that investors will turn their attention to locations outside London.  Outside London and the Southeast, office values have dropped by 14% since June 2009, according to property consultant CBRE.  The gap in yields between West End London offices and property in the rest of the country is up to 10%, versus 1% to 2% before the 2007 crash.  There’s a sign that companies and individuals are “pressed against the ceiling’ of London’s property prices ” unable to spend less or earn more, many are seeking alternatives.

Not all observers agree that the property market in London is in danger, though.  Rightmove predicted a rising market over the coming year, saying that throughout 2012 the strength of London’s property market “stood out like a beacon against the rest of the UK.’  Nine of the ten regions whose prices Rightmove tracks saw property prices fall in December 2012 from the previous month and the only rise, in the East Midlands, was by 0.8%.

Frank Knight reported that London’s Kensington region continued to be popular with foreign investors, and Liam Bailey, Frank Knight’s head of global research, predicted that London would retain its safe haven status, and that this would encourage strong activity across all sectors of the housing market.  In 2012, 70% of London property sales were to foreign buyers, according to Frank Knight.

If London faces a bubble and the rest of the country faces stagnation, what does the future hold?  According to the financial management company PRUPIM, there could be a return of money to the very southern European markets that so recently saw investors flee to Britain.  At least one foreign investor is still interested in the London market, however: PRUPIM recently sold an Oxford Street block to a private foreign investor for £14.8m, reflecting a net initial yield of just over 3%.

Photo credits: Henry via Flickr

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The recovery seen in the global housing market in the latter part of 2009 and into 2010, has stalled badly in the latter part of 2010, according to the latest figures from the Global Property Guide. This is a blow for the industry and everyone involved in it, though it is truer to what economies are currently capable of supporting, and from here should allow us to find a steadier path back to a true recovery.

Global House Price Changes 2009 to 2010

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knightfrank-wealthreport2010

Knight Frank, in conjunction with Citibank has just released its 2010 Wealth Report. The 25 page PDF document confirms what we have already pieced together from multiple reports as 2009 progressed from the first quart throughout the second half:

Prime property — which suffered last at the hands of the financial crisis, but suffered just as hard –experienced a rebound in many locations in 2009, while many more (71% according to the report) locations continued to suffer.

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Knowing – or maybe believing is a better word – that property markets and economies around the world are on the way back up sure is a nice feeling. It may be a short-lived feeling, because according to some there are signs that the short-lived positivity will end as quickly as it begun.

I am not one of the people. But nor am I one of the plastic fantastic optimists that think the only way is up, and that rejoices in reports of UK mortgages doubling, and property in some areas selling for almost the same as it would have at the height of the boom.

The truth is, yes, we are making some headway against the deluge of negative financial news. In fact, a good analogy of the current recession recovery process for me, is a snow plough that has been completely submerged in snow: we have just jumped in and managed to get the engine started, the heat is slowly melting the snow, but we still have a hell of a lot of pushing to do before we clear the drifts.

Squaw Valley Ski Resort Lake Tahoe As anyone who has looked at buying a ski-property in the last few years will know, the global warming phenomena is causing a few problems for the class: meteorologists and other experts on the subject are warning that snowlines will be pushed up around the world.

In the short term global warming is expected to shorten ski-seasons at some of the lower resorts, and over the long term it could shorten the season at the higher altitude resorts and render the lower resorts out of business.