Life on Mars: a guide to the next real estate frontier – The Property Chronicle
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Life on Mars: a guide to the next real estate frontier

The Economist

With the recent interest in Mars’ mineral resources, how far are we really from realising interplanetary living?

I’ll admit, I did listen to the Bowie classic to get some inspiration for this article. Although the lyrics seemed to be more about small town dramas than interplanetary living.

Amidst the mutterings and speculation about whether there is a profit to be made on Mars from its ore resources, further extraterrestrial exploration is looking increasingly possible. With thanks to commercial space companies becoming more successful, and China initiating a new space race with the USA, the prospect of life on Mars becomes that much more realistic.

But, how would real estate markets on the red planet really work? There are some things that we can take from our own past here on Earth, and some things that are, as yet, unknown.

The history of world exploration and its subsequent real estate markets, I believe, has a lot to tell us in this regard. This is particularly true for the colonisation of the Americas. With space as our last frontier, the way in which we may go about settling on Mars in future generations might bear a resemblance to the first wave, or European, colonisation of America – or even the settlement of the American West. What America was to people of the 1600s, extraterrestrial planets are to us: entirely unknown landmasses, far away from life as we know it. Settlers in these brave new worlds would have access to a basic level of life-sustaining technology, but little in the way of production. While they face numerous perils and threats, there is also the potential for great wealth, freedom and other such goals.

Two significant differences between 1600s America and present-day Mars are, of course, that there is not an indigenous population on Mars being displaced or eradicated, and that the level of technology today (and in the near future) is far more advanced than that of the 1700s and 1800s.

It is also probably important to note that the successful settlement of another world by a particular group of people will likely shape the culture, politics, economics and affiliations of that world for the rest of civilisation.

So, who’s got a one-way ticket to Mars? Well, the first people to move to a new area are those ultimately looking for something better than where they came from. They will have the resources to do so and the belief that they can make good of it. The first settlers of the Americas were sent by the states of their time, often privately financed, by kingdoms and profiteers looking for gold and glory. In much the same way, the first settlers of new planets will be sent by various states and companies to seek out resources. These missions will be done with two equal goals: to find a way to transport those resources back to Earth, and to ensure that the colony has some core resources for its own use. Whether or not anything does eventually get sent back to Earth would depend entirely on the commercials of spaceflight and the value of the resources at the time.

The first colonies will therefore likely be adjacent to mineral deposits, as the below image of the Hellas Basin area shows. The colonists themselves will likely have some expertise or willingness to work in the extraction of those resources.

The first colony would also likely be heavily dependent on continued imports from its Earthbound benefactor and would be a spartan environment. So how on Earth (pun intended) would you ever get anyone to move there?

Probably in the same way previous colonial powers persuaded the first settlers in America: give the people who go there access to land, money or power, beyond that which they could achieve on home territory. (Though, burning their boats on arrival probably also helped keep them there after they arrived.) The Spanish Encomiendas of the 1500s and onwards and the American Homestead Act of 1862 are great examples of this.

However, by what right would the earthbound powers be able to allocate that land? There is also the question of how long until the Martian colonists seek independence from politics on Earth, much like the states of the Americas did throughout the 1700s and 1800s. But that’s a slight digression.

Real estate on the surface of Mars would likely be valued in a strictly utilitarian sense, much akin to machinery in a factory. That is to say, it would have an initial cost, with ongoing maintenance expenses thereafter, and it would ultimately provide some commercial benefit, namely, housing colonists to operate the systems of the colony. The real estate would need to be valued in the currency of the benefactor state. This would be because local Martian currency would be too volatile, illiquid and prone to bouts of hyperinflation, depending entirely on the success or failure of resource shipments. Currency controls would likely need to be put in place. As a result of these regulations, a black market of some local currency would likely emerge.

However, if those colonies are economically and socially successful, the market would start to emerge, going from a simple utilitarian environment provided for housing purposes only to a real estate market that has more or less desirable locations and its own dynamics.

Where would those locations begin? Looking at the history of cities here on Earth gives us some clues. Value tends to accrue nearest to power of one kind or another; then subsequently to the social order of that society and its aesthetic appreciation.

The Economist

About Gavriel Merkado

Gavriel Merkado

Gavriel Merkado is Founder and CEO of REalyse, the UK's leading real estate data system. Having previously worked in quantitative strategy with several hedge funds before moving into real estate with companies like Quintain and Essential living he sought to find a way to bring the data analytics capabilities of finance to the world of property. The award winning REalyse platform is now in use by leading financial and real estate firms alike.

Articles by Gavriel Merkado

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