Market viability assessment of a net-zero energy house

Even though the Asian countries have not experienced the same shortage of investment capitals of their European and American counterparts, their economies have not been exempted from the effects of the crisis, due to the intense trade and financial activities with the Western world (PwC and the Urban Land Institute, 2011b; NAI Global, 2012). Such relationships help to explain why in 2009, after almost thirty years of continuous growth, the Chinese economy slowed down abruptly under the effects of the global recession, although exports increased sharply as soon as the above-mentioned economies started to recover (they now account for 27% of GDP). Such a rapid turnaround also allowed China to surpass Japan and become the second largest economy in the world. Growth rates are still not comparable with the pre-recession level, yet China is still the fastest developing economy and it is expected to be so in the nearly future (Euromonitor, 2012c).
In the past decade the Chinese real estate industry played a key role in sustaining the domestic consumption, with an average annual growth of 13% (Euromonitor, 2010b). Such performance is expected to continue in the future in the light of the increasing migration from rural to urban areas, which are estimated to accommodate more than 100 million new people over the next 15-20 years (Business Monitor, 2012a).
The second-fastest growing GDP in the region belongs to India, where the global financial crisis is having a mitigated effect due to a very solid domestic demand (PwC and the Urban Land Institute, 2011b). Keeping up with high growth rates requires great investments in infrastructure and therefore the government has recently announced contributions for over USD 250 billion over the next five years (Euromonitor, 2012d).
Here, the real estate sector is the second-largest employer and the outlook for the future looks positive: by 2015, more than 24 million new dwellings are to be demanded for self-living in urban areas, with consumers that are increasingly moving out of rented dwellings to buy their own home. Moreover, liberalisation policies have reduced the number of permissions and licenses needed before taking up construction projects, with the introduction of looser regulations also to foreign investors (Euromonitor, 2011c; Euromonitor, 2011d). However, it has to be noted that access to financing options is very complicated, both for developers and private customers. In the specific case of privates, mortgage penetration is around 8%, an extremely low level in comparison to other Asian countries (20-41%), EU (52%), and US (77%) (Equitymaster, 2011; European Mortgage Federation, 2010). Consequently, serious affordability issues may arise when marketing a premium product such as FOLD, also considering that the country has the highest annual inflation rate among the BRIC economies (Reuters, 2012).
With regard to sustainability, China, India, and most of the key governments in the region are in the phase of drafting a nation-wide policy to support the growth of solar power. Some countries have already aimed for a specific installed solar power generation capacity, but they lack nation-wide policies and legislation in order to facilitate the roadmap for their targets (Business Insights, 2010). Therefore, investors in renewable projects in the region may need to analyse the gap between the support mechanisms on paper and the actual implementation status while making their decisions (Business Insights, 2011).
For what concerns Japan, the Great Tohoku Earthquake of March 11, 2011 had a significant impact on the economy, as it caused damages for about USD 300 billion. The consequent reduction in industrial and agricultural production led to a high trade deficit, a fall-off in exports and consequently a contraction in GDP, which grew only 0.4% in the year (Global Property Guide, 2012). Even though the government approved a USD 156 billion plan to stimulate the reconstruction process, the long time required for repairs and the high dependency of the Japanese economy on exports towards US and Europe picture long recovery times (PwC and the Urban Land Institute, 2011b).
Moving south towards Australia, the economic situation improves. The Commonwealth was one of the few industrialized countries able to avoid a recession during the financial crisis (due to low exposure to Europe and US) and is expected to grow steadily over the next years (EIU, 2012c). The strong economy, coupled with a fairly low unemployment rate, a growing population, and great government support for first-time homebuyers, drives a wealthy and stable housing market, characterised by increasing funding and interest towards sustainable solutions (Euromonitor, 2011g; Frost & Sullivan, 2011a). [...]