Over the last decade there has been a massive increase in the number of environmentally friendly agreements between governments, new regulations and in many cases new laws. The so-called Green Revolution is hitting every single part of everyday life and there are many who believe its influence over the worldwide economy will continue to grow well into the future. But will the Green Revolution play a major part in the worldwide property market?
There are three trains of thought on this one with many people suggesting the only reason it could affect the property market is the fact there are potential savings for developers and property investors. However, on the other hand many environmentally friendly groups are suggesting that more and more people around the world are looking to do their bit for the environment and are more than willing to become involved in green issues and push for “greener” properties. While others believe that it is all a trick by the governments of the world to extract more taxation from the everyday person.
Let us take a look at the reasons for and against the potential for the Green Revolution to impact upon property markets in the future:-
Arguments for the Green Revolution
There is no doubt that more and more people around the world who are becoming aware of the damage done to the environment over the last century and the potential for serious problems in the future. In line with this and fact that there are practical issues at stake and practical action which can be taken, more and more people are looking towards greener homes. Many homes of the future will have some form of self sufficient energy system, be built out of greener more environmentally friendly material and also have less of an impact on the environment.
More and more homes around the world are appearing with solar panels and an array of wind related energy production systems in order to make use of the energy supplies around us. A number of governments have been proactive in this area and offered an array of tax incentives and savings to those willing to promote and use the systems available today.
This is an aspect of everyday life which has now become central in areas such as waste disposal and materials used for the building of homes and offices. More and more governments around the world are encouraging companies to reuse materials which may have been discarded or deemed as waste in the past. This reuse of materials has seen a major cut back on the storage of waste material using methods such as landfill operations, furnaces and other waste disposal systems which may not be friendly to the environment.
This is a very important issue in that many governments around the world have used the Green Revolution to penalise those who do not abide by the new guidelines and make use of their waste material. Many believe the governments are using the Green Revolution as a means to increase their income under the guise of assisting the environment. This is something which is yet to be confirmed and the jury is certainly out on this one. However, there is no doubt that tax incentives and the like are most certainly tilted in favour of those abiding by the new Green Revolution guidelines.
Against the Green Revolution
One of the main issues raised by those who believe the Green Revolution will not have a long-term impact on property is the fact that many areas of the world are not able or not capable of making use of new technology available in the developed world. Many people also believe that the Green Revolution is just something of a fashion at the moment and many people will slowly drift away as and when it becomes less fashionable to follow this trend.
Even though those who pursue the path followed by the Green Revolution are likely to benefit from taxation rebates, many of the world’s population do not appreciate being dictated to and penalised for what they see as a green tax which is not centred upon the environment. Governments around the world are not willing or not able to confirm as and where these green taxes are reinvested into their economies suggesting that maybe not all green taxes are used for the purpose suggested.
The building costs
The vast array of new regulations have increased the cost of building around the world with many developers either unwilling or unable to take on yet more extra initial cost to pander to the Green Revolution supporters. The current crop of solar panel roof tiles, reusable materials and the like are not cheap and with developers struggling to maintain their margins even in the good times this is not an area under serious consideration.
Not all areas of the world will have access to sufficient light or sufficient wind power to increase their energy production and some reusable materials may not be appropriate for certain extreme areas of the world. There is also a feeling that many of these so-called Green homes are not able to provide services and power similar to those of older homes which can be an issue to some people.
As you might expect, at the end of the day everything seems to come down to cost. There is a feeling that the initial outlay on these new Green Revolution environment friendly homes is too large for many investors to cover even though there may well be long-term savings available. This above all is probably the main issue at this moment in time and something which looks unlikely to change in the short term.
There is no doubt that in certain circumstances the new environment friendly homes we see around the world are applicable and very useful. However, there are many areas of the world where the added cost of these new and revolutionary properties will be too much for local markets to bear. Governments have also added to the mix via a number of so-called “Green” more environment friendly taxes which many around the world regard as yet another income tax and increase in the cost of everyday living.
Slowly slowly we are seeing more and more Green homes coming onto the market but the overall figure compared to the size of the overall market is still tiny. This is the main reason why the Green Revolution is unlikely to dominate any property market around the world in the short to medium term.