Homebuilders unload solid earnings as spring arrives – but prices are muddling the forecast
Cul-de-sac mania… America’s largest homebuilders nailed earnings beats this month as they cranked out new builds to ease low inventory. Last week, KB Home said its quarterly revenue grew 6% and net new-home orders surged 55%. Rival Lennar’s home deliveries jumped 23% while revenue grew 13%. But with spring here, the housing market isn’t all sunshine and roses. Closed house: New-home sales dipped slightly in February as mortgage rates ticked up, though the median sale price for a new home fell to $400K from $415K in January. Open hand: Homebuilders are dishing out more perks to lock in cash-strapped buyers (think: covering $500 inspection fees). KB Home said that last quarter over half its deals came with concessions. Escrow anxiety… Last year, low housing inventory and 23-year-high interest rates contributed to the lowest existing-home sales in nearly three decades. But even as builders like Lennar and KB ramp up production, the US market is still short up to 7.2M homes. Most first-time homebuyers now spend over 40% of their monthly income on home payments. Would-be buyers need to earn nearly $50K more than they did prepandemic to afford a new pad. Even those who earn enough may have a hard time finding their dream home. Golden cuffs: A lot of homeowners are unwilling to give up the low mortgage rates they locked in during the pandemic. Recently, nearly 70% said they didn’t plan on moving anytime soon. There’s less spring in housing’s step… Spring is historically the housing market’s sweetest szn thanks to higher inventory and better weather (picture: sun-soaked gardens in full bloom). But Americans are facing the least affordable housing market since 1984, and while rate cuts could spark a home-buying spree later this year, they may also drive up prices by boosting demand.
Builders Set Their Sights on Growth in 2024
Key takeaways More new home supply is coming. Homebuilders plan to increase their actively selling communities by +11% in 2024, as indicated by our survey and builders’ hunt for new lots and land. While climbing mortgage rates in February tempered the start of the spring selling season, short- and long-term indicators confirm that homebuilders are optimistic as they prepare for a strong year. Our 13 proprietary surveys provide timely and accurate trends that give our Research members huge decision-making competitive advantages. Need help understanding the market to make a big decision? Our Consulting team completed almost 1,000 consulting assignments last year, guiding decisions on strategies, company M&A, and asset due diligence in more than 100 metro areas. Builders expect double-digit community growth nationally. Builders have bought enough land to increase their actively selling communities +11% by year-end, according to our monthly Burns Home Builder Survey. Builders plan to open more communities as quickly as possible to capitalize on today’s: Very low resale inventory Strong sales pace and pricing power Total sales and starts slowed at the end of last year because communities sold out faster than expected. Planned growth varies widely across the country. Florida and Southeast builders guided to the strongest community count growth rate in 2024 (+17% more communities YOY). On the hunt for new lots and land Our quarterly Burns Residential Land Survey also supports projected community count growth. Our consultants, as well as our land survey participants, are seeing bidding wars on finished lots since they require little to no development work to bring new communities to life. These finished lots are in short supply. We also summarize salient facts from more than 70 publicly traded company earnings calls each quarter. D.R. Horton, the nation’s largest homebuilder, noted in its earnings call on January 23: While low supply of developed land and soaring land/lot prices will remain a bottleneck for builders, many are ramping up self-development efforts that provide development profits and a steady supply of land/lots. Taylor Morrison (TMHC) recently noted in its earnings call on February 14: Cautious yet optimistic sales expectations While builders prepare for the longer term by increasing community counts and buying land and lots, most also anticipate short-term success. In our March Burns Home Builder Survey (measuring February conditions), 41% of builders expect Good sales over the next six months. The percentage of builders expecting Good sales fell from the previous month, reflecting a slower-than-expected February after a stronger-than-expected January. As we move through the spring selling season, our clients will benefit from mid-month builder channel checks, where we will watch closely for changes in builder sentiment. Short- and long-term indicators confirm that homebuilders are optimistic as they prepare for a strong year. While we remain particularly concerned about housing affordability, we do not see any signs that builders will slow their growth plans anytime soon.
Homebuilder sentiment turns positive for the first time since July
U.S. homebuilders are feeling more confident about their businesses than they have since last summer, as they see better demand despite stubbornly high mortgage rates. Homebuilder sentiment rose 3 points in March to 51 on the National Association of Home Builders/Wells Fargo Housing Market Index. The reading gained for the fourth-straight month, hitting its highest level since July. Sentiment also moved into positive territory for the first time since July. Fifty is the line between positive and negative sentiment. Mortgage rates came down in the first week of March, only to shoot back up in the second week. The average rate on the popular 30-year fixed mortgage has hovered around 7% since early February. “Buyer demand remains brisk and we expect more consumers to jump off the sidelines and into the marketplace if mortgage rates continue to fall later this year,” said NAHB Chairman Carl Harris, a custom homebuilder from Wichita, Kansas. “But even though there is strong pent-up demand, builders continue to face several supply-side challenges, including a scarcity of buildable lots and skilled labor, and new restrictive codes that continue to increase the cost of building homes.” Of the index’s three components, current sales conditions rose 4 points to 56, expectations in the next six months rose 2 points to 62 and buyer traffic increased 2 points to 34. Regionally, on a three-month moving average, sentiment rose most in the Midwest and West. The report also noted that fewer builders are lowering home prices to attract buyers. In March, 24% of builders reported cutting home prices, down from 36% in December 2023 and the lowest share since July. The average price cut remains steady at around 6%. Builders are still using sales incentives such as buying down mortgage rates. “With the Federal Reserve expected to announce future rate cuts in the second half of 2024, lower financing costs will draw many prospective buyers into the market,” said Robert Dietz, chief economist for the NAHB. “However, as home building activity picks up, builders will likely grapple with rising material prices, particularly for lumber.”
Larry Fink Bets Tokenization will be 100x Bigger than Bitcoin
In the fevered pitch of the latest Bitcoin bull run, it’s easy to miss the bigger story. As we zoom out from the immediate highs and lows of the crypto markets, a much more significant revolution is quietly gaining momentum: the tokenization of financial assets, a movement that could redefine investing as we know it. Let’s be blunt: the financial world as we know it is archaic. It’s a maze of middlemen, from brokers to banks to clearinghouses, each taking a slice of the pie and slowing down transactions to a crawl. In a world where technology has given us the means to communicate instantaneously across the globe, why does transferring ownership of assets feel like sending a letter by snail mail? Enter blockchain technology. Beyond the buzz and the speculation lies a truly transformative idea: what if every financial asset could be represented digitally and securely on a blockchain? This isn’t just about cryptocurrencies; we’re talking about everything from stocks and bonds to real estate. And Larry Fink, the CEO of BlackRock, isn’t just watching from the sidelines. He’s thrown down the gauntlet with his vision of “the tokenization of every financial asset.” And he’s not alone. Estimates suggest that tokenized “real-world assets” could be worth a staggering $10 trillion by 2030. In real estate tokenization, Imagine a world where buying a house no longer requires the costly and time-consuming process of title searches and title insurance, thanks to blockchain technology. In this scenario, every property transaction is recorded securely and immutably on a blockchain, creating a clear, accessible history of ownership and liens. Think CarFax for real estate. This transparency drastically reduces the need for title insurance and the associated due diligence, slashing costs for buyers and sellers. Moreover, with smart contracts automating and verifying each step of the transaction, the process that once took weeks can now be completed in days or even hours, streamlining the entire real estate purchasing journey while ensuring accuracy and security. This is the power of blockchain in transforming real estate transactions—making them faster, cheaper, and more reliable for everyone involved. But here’s the rub: this isn’t a smooth road. The challenges are substantial, from technological hurdles to regulatory mazes. Our own SEC is not willing to provide a clearer path, so half of tokenization has to be done here and the other half in a foreign country like Dubai or El Salvador (for secondary market trading). However, the tide is turning. Projects like UBS’s digital bond and Blackrock’s tokenized money market fund on the blockchain are proving that traditional financial giants can innovate. HSBC’s use of blockchain for settlement in repurchase agreements shows the old guard is learning new tricks. The real kicker, though? Regulators are starting to come around. The UK, EU, and even the US are experimenting with “sandboxes” to allow financial institutions to test the waters of tokenization within a controlled regulatory environment. This is more than just bureaucratic wheel-spinning; it’s a sign that the powers that be recognize the potential of blockchain to revolutionize finance—and they’re willing to adapt to accommodate it. So here’s my take: While Bitcoin and Ethereum are getting all of the buzz, these are merely precursors to a 100X bigger opportunity. The tokenization of assets is not just an interesting sidebar in the story of blockchain technology. It’s the main event. It’s a seismic shift that promises to make investing more efficient, transparent, and accessible. The journey won’t be without its bumps, but the destination? It’s a future where the real estate on your screen can be as liquid as the cash in your wallet, where investing in a startup on the other side of the world is as simple as buying a book online. Yes, there are mountains to climb just like there were for Ethereum and Bitcoin, but the potential for tokenization to reshape the landscape of investing is too great to ignore. To those entrenched in the old ways, consider this a wake-up call. The future is tokenized!
Wall Street sees a solid year ahead for homebuilders, though mortgage rates remain a wildcard
LOS ANGELES (AP) — Housing market trends are shaping up in favor of a solid 2024 for U.S. homebuilders — as long as mortgage rates don’t jump back to the highs they hit late last year. Sales of new homes rose nationally in 2023 for the first time in two years, climbing 4.2% from a year earlier, according to the Commerce Department. This bucked the trajectory of the broader housing market, which remained mired in a deep slump as sales of previously occupied U.S. homes sank roughly 19% to a nearly 30-year low. Homebuilders were able to mitigate the impact of higher interest rates on home shoppers by lowering prices and offering incentives like paying buyers’ closing costs or buying down the rate on their mortgage. They also benefited from a chronically low inventory of existing homes on the market. Those market trends are expected to help give homebuilders a leg up again this year, Wall Street analysts say. Moody’s Investors Service projects that new U.S. home sales will increase 5% in 2024, citing strong demand among millennials and a healthy job market. The new-home market’s “healthy fundamentals should result in a solid year for U.S. homebuilders,” the Moody’s analysts wrote in the report released this week. Underpinning much of the optimism are expectations that mortgage rates will continue to decline this year. Moody’s forecasts that the average rate on a 30-year fixed mortgage will drop to 6.4% by the fourth quarter. Forecasts by several housing economists see the average rate declining this year, though generally no lower than 6%. The average rate on a 30-year mortgage has eased since reaching a 23-year high of 7.79% in late October. But rates have been creeping higher in recent weeks as stronger-than-expected reports on inflation and the economy have stoked worries among bond investors that the Federal Reserve will wait longer than anticipated before it begins cutting interest rates. While higher rates are not good for homebuilders, they can still fall back on incentives to help spur sales as they did last year, said Carl Reichardt, a homebuilding analyst at BTIG, “My expectation for 2024, which is very modest growth in new home sales, really comes from a stabilization in interest rates and continued lack of competition from existing homes,” he said. Wall Street has cheered how homebuilders adapted to a rocky housing market last year. Shares in PulteGroup, Lennar and most other U.S. homebuilders are up substantially over the past 12 months. One prominent exchange traded fund, the SPDR S&P Homebuilders ETF, is up roughly 48% in the same period, while the benchmark S&P 500 index is up nearly 25%. Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
The hottest trend in U.S. cities? Changing zoning rules to allow more housing
America is facing a housing crisis. The U.S. is short millions of housing units. Half of renters are paying more than a third of their salary in housing costs, and for those looking to buy, scant few homes on the market are affordable for a typical household. To ramp up supply, cities are taking a fresh look at their zoning rules that spell out what can be built where and what can’t. And many are finding that their old rules are too rigid, making it too hard and too expensive to build many new homes. So these cities, as well as some states, are undertaking a process called zoning reform. They’re crafting new rules that do things like allow multifamily homes in more neighborhoods, encourage more density near transit and streamline permitting processes for those trying to build. One city has been at the forefront of these conversations: Minneapolis. That’s because Minneapolis was ahead of the pack as it made a series of changes to its zoning rules in recent years: allowing more density downtown and along transit corridors, getting rid of parking requirements, permitting construction of accessory dwelling units (ADUs), which are secondary dwellings on the same lot. And one change in particular made national news: The city ended single-family zoning, allowing two- and three-unit homes to be built in every neighborhood. Researchers at The Pew Charitable Trusts examined the effects of the changes between 2017 and 2022, as many of the city’s most significant zoning reforms came into effect. They found what they call a “blueprint for housing affordability.” “We saw Minneapolis add 12% to its housing stock in just that five-year period, far more than other cities,” Alex Horowitz, director of housing policy initiatives at Pew, told NPR. The researchers also examined what kind of housing was built. They found that for all the hubbub about duplexes and triplexes in former single-family-only areas, very few have been built. One reason is that they still had to be the same size as a single-family home, making them less feasible to build. Instead, the vast majority of new housing was in midsize apartment buildings with 20 or more units. “The zoning reforms made apartments feasible. They made them less expensive to build. And they were saying yes when builders submitted applications to build apartment buildings. So they got a lot of new housing in a short period of time,” says Horowitz. That supply increase appears to have helped keep rents down too. Rents in Minneapolis rose just 1% during this time, while they increased 14% in the rest of Minnesota. Horowitz says cities such as Minneapolis, Houston and Tysons, Va., have built a lot of housing in the last few years and, accordingly, have seen rents stabilize while wages continue to rise, in contrast with much of the country. In Houston, policymakers reduced minimum lot sizes from 5,000 square feet to 1,400. That spurred a town house boom that helped increase the housing stock enough to slow rent growth in the city, Horowitz says. Allowing more housing, creating more options Now, these sorts of changes are happening in cities and towns around the country. Researchers at the University of California, Berkeley built a zoning reform tracker and identified zoning reform efforts in more than 100 municipal jurisdictions in the U.S. in recent years. Milwaukee, New York City and Columbus, Ohio, are all undertaking reform of their codes. Smaller cities are winning accolades for their zoning changes too, including Walla Walla, Wash., and South Bend, Indiana. Zoning reform looks different in every city, according to each one’s own history and housing stock. But the messaging that city leaders use to build support for these changes often has certain terms in common: “gentle density,” building “missing middle” housing and creating more choices. Sara Moran, 33, moved from Houston to Minneapolis a few months ago, where she lives in a new 12-unit apartment building called the Sundial Building, in the Kingfield neighborhood. The building is brick, three stories and super energy efficient — and until just a few years ago, it couldn’t be built. For one thing, there’s no off-street parking. “It was exactly what I was looking for,” Moran says of her 450-square-foot space, on a cold but sunny day in January. “I specifically wanted a smaller apartment because it takes less time to maintain. You can spend more time traveling because you’re not paying as much for a big apartment, and then it’s a little easier to live in whatever neighborhood you like.” Now, she rides her e-bike out her patio door, and there’s a bus stop on the corner and a bakery next door. “There’s just so much I can do in terms of walking to things, biking to things,” Moran says, adding that she hasn’t biked in sub-10-degree temperatures just yet. “I think I might use that bus if it stays under 10 degrees long.” The Sundial is the sort of building many cities want more of: housing that offers options for people at different income levels and different stages in their lives, in neighborhoods that already have amenities like restaurants and transit routes. Meg McMahan, planning director for the city of Minneapolis, says the Sundial is a good example of how these reforms can make more housing units possible in more places. It’s no accident that throwing out the parking rules was vital to the Sundial’s construction. “The elimination of parking requirements has been the most effective regulatory reform we have made,” McMahan says. “We’re really dealing with outdated and inequitable regulations” Cities’ zoning rules often stand in the way of building much new housing. A 2019 analysis by The New York Times looked at 11 U.S. cities and suburbs and found that in most of them, 75% or more of the residential land is zoned to allow only detached, single-family homes. No rowhouses, no apartments. In Connecticut, researchers found that three-unit homes are permitted by right on just 2.5% of the state’s
The Reawakening Of Real Estate Tokenization: Why Businesses Should Take Note
Though tokenization isn’t a novel concept, recent years have witnessed a resurgent interest in it. As businesses increasingly align with the Web3 paradigm, entities ranging from financial institutions to asset managers are exploring tokenization’s potential. In essence, tokenization involves creating a digital representation of a conventional asset using blockchain. It is projected that by 2030, tokenized digital securities will reach almost $4 trillion. Previously, tokenization faced setbacks due to technological scalability constraints, the lack of a regulatory framework, market volatility and complexity for average users. However, as blockchain technology evolves, many of these issues are gradually being fixed. Currently, we observe progress in cash tokenization projects. Numerous regions—including the European Union, Japan, Singapore and the United Kingdom—have introduced regulatory guidelines for digital assets. There’s also an enhanced understanding of the technology among market participants. While tokenization’s applicability spans diverse assets and sectors, I’ve found real estate tokenization especially promising, having overseen numerous asset tokenization projects at my firm. In 2022, the market size for real estate tokenization was $2.7 billion, and it’s projected to surge to $18.2 billion by 2032. Business Benefits Of Real Estate Tokenization The real estate sector, traditionally a magnet for investors, has to deal with some notable challenges, such as low accessibility and liquidity, security issues, and the lack of transparency. Tokenization offers solutions to these challenges. Turns Illiquid Assets Into Liquid Ones Historically, realizing the value of real estate assets necessitated selling the entire property. However, tokenization allows for fractional ownership, which means that an individual can own, for instance, 10% of a property. By breaking the asset down into smaller, more affordable pieces, it’s easier to find buyers and sellers. Allows For Easier Market Accessibility Tokenization democratizes real estate investments. By dividing properties into tokens, it reduces the capital threshold, extending investment opportunities to a wider audience. Removes Intermediaries Traditional real estate transactions involve numerous intermediaries (brokers, agents, legal representatives), which each adds to the cost and complexity. Tokenization eliminates these middlemen and provides more cost-efficient procedures. Ensures Transparency And Security Blockchain guarantees transparency and equal access to asset information with its immutable ledger. It’s also difficult to tamper with the data stored on the blockchain, meaning that investors can be sure that ownership records and transaction data remain trustworthy. Pro Tips On Successful Implementation Of Real Estate Tokenization Projects Crafting a real estate tokenization solution, just like any other project, requires formulating a clear vision and strategy, selecting the right tech stack and constructing a robust solution architecture. You should also choose between a ready platform and developing your own. In my opinion, while ready-made platforms for real estate tokenization provide a convenient start, they often fall short in terms of customization and scalability. Though developing your own solution requires more initial effort, it ensures flexibility, allowing you to tailor it to your specific needs. However, in the realm of tokenization, there are certain distinct factors that drive a project’s success. Based on our experience gained from tokenization projects, I would say that these factors are robust tokenomics, carefully planned token sale rounds and impactful marketing materials. By focusing on these elements, you can set the stage for a successful real estate tokenization project. Robust Tokenomics As The Key To Project Success To invest in the project, individuals must clearly understand the value of the token. A well-structured token economy fosters transparency and investor trust, which is crucial since real estate investments require significant capital. To create a successful project, you need to define the following. Token use cases – Determine the utility of your tokens and articulate it to investors. Token distribution – Plan how your tokens will be distributed. This includes allocations for team members, advisors and the public. Make sure it’s equitable to maintain project credibility. Staking rewards – They will incentivize token holders to keep their tokens and stabilize their value. Vesting and cliff periods – A vesting period refers to the process where an individual gains access to their tokens incrementally over time, while the cliff period is a duration during which no tokens are accessible. Implementing vesting and cliff periods helps you ensure that project stakeholders, advisors and team members remain committed to the project for the long term. Token burning – Implement a mechanism to periodically burn a predetermined number of tokens. This helps maintain a balanced token economy by aligning the token supply with market demand. Carefully Planned Token Sale Rounds To Secure Initial Capital Conducting several funding rounds enables projects to gather the essential starting capital for their operations. As these rounds progress, the token’s price should begin at a lower rate and increase with each phase, benefiting early investors. Typically, the project should include three types of sale rounds. Private sale – Tokens are usually priced lower than in public sales or presales. This reduced price acknowledges the investor’s early commitment to the project. Pre-sale – The token price is usually set lower than in the public sale, rewarding participants with a discount for their early engagement. Public sale – Accessible for a wider community interested in the projects; this is the final sale round, so the tokens should be unlocked simultaneously. Impactful Marketing Strategy For Better Community Engagement Crafting a successful tokenization project requires more than just a technical foundation; it necessitates clear communication. You need to regularly engage with your investors and community through marketing materials. These include: Comprehensive whitepaper. This cornerstone document will explain your project specifics, including goals, challenges it addresses, technical details and a roadmap. Interactive visual materials. These include infographics, presentations, and other materials that promote your idea. Community channels. Regularly update potential investors and the broader community on project advancements. Platforms such as Medium, Discord and Telegram will help you ensure open communication. Overall, I believe that real estate tokenization has great potential for both creators and investors. With meticulous preparation and effective communication, these ventures can not only achieve their objectives but also deliver outstanding results to stakeholders.
Tokenization: The Future of Real Estate
Real Estate Tokenization Market Booms with Impressive CAGR of 19.8%: New Report Reveals Robust Growth in Property Tokenization Industry – Prophecy Market Insights
Real Estate Tokenization is the procedure of converting real estate value assets in digital tokens on block-chain to enable ownership and digital transfer. The growing need to protect sensitive data by adhering to PCI DSS rules, as well as an increase in the number of payment frauds has contributed to the growth of the Real Estate Tokenization market. Wide applications in compliance management, user authentication and payment security is anticipated to increase the demand for Real Estate Tokenization market in future. Order free Sample Copy of the Report: https://www.prophecymarketinsights.com/market_insight/Insight/request-sample/4857 (The sample of this report is readily available on request. The report sample contains a brief introduction to the research report, Table of Contents, Graphical introduction of regional analysis, Top players in the market with their revenue analysis and our research methodology.) Our Sample Report Includes: 2032 Updated Report Introduction, Overview, and In-depth industry analysis. 115+ Pages Research Report (Inclusion of Updated Research). Provide Chapter-wise guidance on Request. 2023 Updated Regional Analysis with Graphical Representation of Size, Share & Trends. Includes Updated List of table & figures. Updated Report Includes Top Market Players with their Business Strategy, Sales Volume, and Revenue Analysis. Market Dynamics: Real estate tokenization is a relatively new concept that involves using blockchain technology to fractionalize ownership of real estate assets. The market for real estate tokenization has been rapidly growing in recent years, as it provides several benefits to real estate investors, including increased liquidity, reduced transaction costs, and access to a broader pool of investors. One of the primary industry dynamics driving the growth of the real estate tokenization market is the increasing demand for alternative investment opportunities. Traditional real estate investment opportunities can be costly, illiquid, and require significant capital investments. Real estate tokenization allows investors to purchase fractional ownership in real estate assets, reducing the capital requirements and increasing accessibility to a broader pool of investors. Another factor driving the growth of the real estate tokenization market is the increasing adoption of blockchain technology. Blockchain technology provides a secure and transparent method of tracking ownership and transferring assets, making it an ideal platform for real estate tokenization. Additionally, the use of blockchain technology reduces the need for intermediaries, which can help reduce transaction costs and improve the efficiency of the real estate investment process. One of the challenges facing the real estate tokenization market is regulatory uncertainty. Many countries have yet to establish clear regulations regarding real estate tokenization, creating a challenging environment for market participants. However, as the market continues to mature, regulators are expected to provide clearer guidelines, providing greater certainty for investors and market participants. Overall, the real estate tokenization market is expected to continue to grow in the coming years as more investors seek alternative investment opportunities and the adoption of blockchain technology continues to increase. While regulatory challenges remain, the benefits of real estate tokenization are significant, and the market is expected to mature as regulations become clearer. Key Highlights: In March 2023, CoFund launched new and first Real Estate Tokenization Project with innovative investment of $10,000,000 in valuable 4-star hotel in Bali, Indonesia. Tokenization will provide various advantages such as liquidity, fractional ownership, lower barriers to entry, transparency, high potential returns and diversification. In January 2022, Realbox launched new and world’s first blockchain-based Real Estate Tokenization platform which enable real estate ownership to be subdivided through tokenization and to provide opportunity to retail investors to share ownership in real estate investment globally. Growth Drivers: There are several drivers of growth in various industries, including: Technological advancements: Advancements in technology can create new opportunities for businesses to improve their products or services, streamline processes, and reduce costs. For example, the growth of e-commerce has been driven by advancements in online payment systems, logistics, and mobile technology. Demographic shifts: Changes in demographics, such as an aging population or increasing diversity, can create new markets and opportunities for businesses. For example, the aging population in many countries has led to an increase in demand for healthcare services and products. Economic factors: Economic factors, such as interest rates, inflation, and consumer confidence, can impact consumer spending and business investment decisions. For example, low interest rates can make it more attractive for businesses to invest in new projects or expand their operations. Globalization: Globalization has created new opportunities for businesses to expand their customer base and access new markets. This has been facilitated by advancements in transportation and communication technology. Regulatory changes: Changes in regulations or policies can create new opportunities for businesses that are able to adapt to the new environment. For example, the legalization of marijuana in some countries has created new markets for cannabis-related products and services. Environmental concerns: Growing awareness of environmental issues and the need for sustainability has created opportunities for businesses that are able to provide environmentally-friendly products or services. Overall, growth drivers can vary depending on the industry and the specific business. However, businesses that are able to identify and capitalize on these drivers are more likely to experience sustainable growth over the long term. Growth Restrains: Just like there are drivers of growth, there are also factors that can restrain growth in industries. These may include: Economic factors: Economic factors such as recessions, inflation, or a slowdown in consumer spending can have a significant impact on businesses and their ability to grow. Regulatory constraints: Regulations or policies that limit or restrict business activities can be a significant constraint on growth. For example, environmental regulations can limit the use of certain materials or require additional investment in new technology. Competition: Competition can constrain growth by reducing profit margins or making it more difficult to enter new markets. Intense competition can also force businesses to invest heavily in marketing and advertising to maintain their market share. Resource limitations: Businesses may be constrained by limited resources such as funding, skilled labor, or raw materials. These limitations can make it difficult to expand operations or invest in new projects. Technological limitations: Technological limitations can prevent businesses from taking
