The Link between Credit Growth and Real Estate Bubbles
April 3, 2025
Real estate is a controversial investment. Some are of the opinion that it is the best investment that one can make and that real estate has created more wealth than any other asset classes for the poor and middle-class citizens. Several others are of the opinion that real estate investments are substandard urban houses that…
The average person assumes that buying real estate from an individual is about the same thing as buying it from a developer. However, that is not the case. Even though the property under consideration is the same, the motives and capabilities of the buyer vary vastly. As a result, the deals made will be very…
The real estate market in China has undergone a complete shift. At one point in time, the Chinese workers were assured of secure housing by their communist government. However, the recent trend in Chinese real estate has made real estate unaffordable even for the highly paid middle class employees making it a completely different ball…
There is a relatively new form of a business model emerging in the real estate space across the world. The model is addressed by several names viz. co-working spaces, on-demand workplaces, shared offices, etc. This workspace model has gained impetus because of spiraling real estate costs. It is also very effective for companies who do not want to tie themselves down with long-term lease obligations and instead have a flexible cost structure. In this article, we will have a closer look at this trend of shared offices.
All workers should not be required to commute to one location for work. Instead, workers should be allowed to log in to the nearest shares workplace center. Time saved commuting results in more productive employees who can work longer hours in tasks that actually add value to the organization.
Alternatively, they have to cramp up the existing workplace and ensure that they ten new employees fit in the existing office. However, with shared workspaces, this is not the case. Companies can rent exactly as many desks they need and for the exact period of time that they need.
Some companies believe that headcount in a more appropriate metric to allocate costs. On the other hand, other companies may believe that headcount is more appropriate. Also, since the bill is being shared, companies will not have an incentive to minimize the usage of electricity, water or other such scarce resources.
Developers are trying to circumvent this problem by building these costs within the lease prices. However, that ends up causing wastage of resources and even leads to disputes in many cases.
The future of workspaces is likely to be a fusion of the two models. The regular, mundane work which is not mission-critical may be performed at shared workspaces because of lower costs and other advantages that they offer. However, higher-end tasks which involve sensitive data and strategy information may continue to remain within the realm of leased workspaces.
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