The Market Seen from the Street: Can Technology be the Solution to the Housing Crisis?

Residential properties have a distinctive feature that sets them apart from other segments of the real estate market, such as hotels, office buildings, and industrial properties. Access to housing is a constitutional right in all developed economies, essential for the social balance of countries.

Currently, we are experiencing a global housing accessibility crisis. As such, it is crucial to seek solutions that can "produce houses" to meet people's needs (cost, features) considering the current reality of the sector (lack of skilled labor, high financing costs, the need to incorporate ESG rules).

The "technological revolution" in the sector, somewhat slower than in other industries, accelerated by the COVID-19 Crisis which has introduced many innovations that promise new solutions to improve efficiency and productivity in various activities that represent the Industry Ecosystem (Construction, Engineering, Architecture, Property Management, Valuation, Real Estate Mediation, etc.). However, when thinking about solutions to "combat" the global housing crisis, I believe that the 3D House Printing system will be the technology with the greatest impact on solving the severe problem of housing accessibility.

Figure 1 - Example of construction through 3D Printing

What does this technology entail?

The three-dimensional printing technology allows for the construction of houses, layer by layer, using materials such as concrete, plastic, or bio-resins according to a predetermined digital design. 3D house printing presents several competitive advantages compared to traditional construction methods, such as:

Cost and Time Reduction: Construction can be significantly faster and less expensive compared to traditional methods, as it reduces the need for labor and minimizes material waste.

Customization: It offers flexibility in design, allowing for the creation of complex shapes and structures that can be tailored to the specific needs of future users.

Sustainability: The ability to use more sustainable materials and the reduction in construction waste make this option more eco-friendly. Additionally, some technologies allow for the use of recycled or biodegradable materials.

Accessibility: It can make housing more accessible due to the speed of construction and low cost.

Material Innovation: Ongoing research in 3D printing materials paves the way for the use of compounds that improve the energy efficiency of homes and resistance to external elements, enhancing their quality.

The BIOHOME3D Example (learn more: https://bit.ly/3OHWKZ9)

The Advanced Structures and Composites Center at the University of Maine has developed a process that allows them to print 3D houses exclusively from bio-resins and wood fibers. The main goal of the project is to "mitigate the lack of labor" and increase access to affordable housing. The pilot project began with a prototype of a one bedroom apartment 55 sqm. The houses developed are fully recyclable and constructed entirely from biodegradable materials (including wood flour). Additionally, the incorporation of monitoring sensors allows for the measurement of thermal, "environmental," and structural behavior, obtaining data that will enable future improvements in design and respective construction solutions. The aim is continuous improvement, reducing CO2 emissions, energy consumption, and allowing for the reuse of vital resources such as water. This is a prime example of technological evolution aligned with the environmental objectives that the construction industry needs to meet. The implemented monitoring systems will allow for more efficient intervention in terms
of the property's maintenance plan, defending its VALUE throughout its lifecycle.
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Figure 2 - Example of a BIOHOME3D house, Exterior and Interior

Applicability to the Portuguese Market

The implementation of this technology will allow for a drastic reduction in the production cycle of a house, significantly decreasing the investment risk in residential development projects, enabling an increase in market supply, and potentially reducing sales and rental prices.

The development of a residential project (for example, a building composed  by several apartments, with 5000 sqm Gross Construction Area) in Portugal, on average, has a development cycle of about 4 years (2 years for licensing and 2 years for construction).

This reality determines the inability to create supply that meets the demand in a "timely manner." For this reason, the investment risks increase significantly, and as such, the profitability required in attracting investment for Residential Development Projects is necessarily high.

The adoption of this construction technology will allow for a significant reduction of risk for the various stakeholders in the process (Developers, Investors, Financiers, Buyers, Tenants, etc.), creating a much more liquid, attractive, and reliable market ecosystem.

However, I believe there are some factors that could hinder the implementation of 3D House Printing in the short term.

The implementation costs and the regulation associated with the construction sector in Portugal could be barriers to the "democratization of the use" of this technology.

The acquisition and installation of the necessary equipment and the need to train people to operate the system are processes with significant initial investment. A medium/long-term vision will be essential.

The construction sector is highly regulated, and the introduction of new technologies requires adaptation to existing norms and regulations. The review of these processes is bureaucratic and time-consuming.

In summary, the real estate sector is resistant to innovation and sensitive to associated costs. Historically, investment in Research and Development (R&D) has been minimal compared to other industries. However, the needs are evident, and the solutions are urgent. It's a matter of time.