Page 26 - QUALITY MAGAZINE_Volume 02 (Issue II)_Web Ready File (1)

QUALIT Y JANUARY 2024

Real Estate Literacy: Key to 2 What is real estate, and why do

you consider it so important?
Quality Wealth Accumulation Real estate can be defined in many ways, but for For the second question, I can start saying that Real

simplicity, let’s define it as follows: real estate refers
estate is a multifaceted sector with profound economic,
and Sustainable Development to property consisting of land and buildings, along social, and environmental significance.
with natural resources like crops, minerals, or water. It
In the aspect of economy, real estate drives economic
also includes the rights to the land and its associated
resources. Essentially, real estate encompasses both growth by contributing to GDP through construction,
sales, and property management services. It supports
physical properties and the legal rights associated with millions of jobs and is a major contributor to national
owning, leasing, and using these properties. economies. Homeownership is key for wealth
Wathsala Wickramanayake FRICS accumulation and offers investment opportunities with

Chartered Valuation Surveyor returns through rental income, property appreciation,
FRICS (UK), Professional Associate Member (IVSL) and tax benefits.
B.Sc. Estate Management & Valuation (Special) (USJP), MBA (PIM)
Managing Director at WikiFrank Chartered Valuers
RICS APC Assessor and Counsellor
Board Member WCIC
Former Ex-Co Member RICS SL
Global Ambassador Lion Heart RICS

1 Among many possible topics, why did

you choose "Real Estate Literacy" as
the focus of our discussion today?

selected “Real Estate Literacy” because it’s a Additionally, think about the consequences of
critical topic that affects individuals, businesses, overpaying for a property, getting trapped in high
I and society at large. To illustrate the gravity of this borrowing costs, or facing financial instability due
topic, let’s consider a few real-world examples. to failing to account for all the costs associated with
Imagine an individual or a business facing significant property ownership, such as maintenance, taxes,
financial losses because their properties didn’t insurance, and unexpected repairs. There are also risks
appreciate in value or generate the expected rental of fraud and scams, and unsustainable development
income. This often happens due to poor investment contributes to climate change and environmental
decisions, where individuals or businesses invest in degradation.
properties without understanding market trends, These examples highlight the critical nature of
property valuation, or potential returns on investment. real estate literacy. The absence of it can lead to a
Consider the 2008 financial crisis. Many homebuyers multitude of negative outcomes-financial, legal, social,
took on subprime mortgages without fully and environmental-affecting personal well-being and
understanding the terms or risks involved. When broader economic stability. These are the reasons why
housing prices fell, they couldn’t keep up with mortgage I chose this topic for our discussion.
payments, leading to widespread foreclosures and
financial ruin for millions of families. This stark
example underscores the consequences of poor real
estate literacy.
Another scenario involves an individual who spends
millions of their hard-earned money over a lifetime to
construct a residence, only to face legal and planning
issues. Without proper knowledge, individuals
and businesses might inadvertently violate zoning
laws, building codes, or tenancy regulations. Non-
compliance can result in legal disputes, fines, and even
the demolition of structures.

Department of Industrial Quality Management
Department of Industrial Quality Management
24 Department of Industrial Quality Management Department of Industrial Quality Management 25
General Sir John Kotelawala Defence University General Sir John Kotelawala Defence University