The Link between Credit Growth and Real Estate Bubbles
February 12, 2025
In the previous article, we studied about frictional unemployment. We understood as to why frictional unemployment is a temporary situation caused by the workers own wishes. It is not a social evil and therefore should not be categorized as such. In this article, we will have a look at the second type of unemployment. This […]
In the previous couple of articles, we listed down the problems with the procedure used to collect numbers related to inflation. In this article, we will go a step further. In this article, the central point being said is that even after all the efforts are done and the numbers are collected they aren’t really […]
What is Demand? Demand for a commodity refers to the quantity of the commodity that people are willing to purchase at a specific price per unit of time, other factors (such as price of related goods, income, tastes and preferences, advertising, etc) being constant. Demand includes the desire to buy the commodity accompanied by the […]
Most developed countries in the world have a minimum wage act. This means that there exist legislations in those countries which make it illegal to hire anybody to do any kind of work unless they are paid at least a certain stipulated amount per hour of their labor. These laws have created immense debates as […]
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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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