From the way the British press talk about the housing crisis you would think it is unique to the UK. It isn’t. Much of the world has a housing problem of one sort or another.
In what is euphemistically referred to as the ‘developed’ world the problem is mainly affordability; but this is not solely a consequence of shortage of supply pushing up prices. Misguided government policy is frequently the culprit.
In the English-speaking world the UK, Ireland, Australia, Canada and New Zealand all have their problems, which are analysed and compared in a Social Market Foundation Report.
The report points to the similarity of political, legal and financial structures in these countries (bequethed by British colonial origins), which has seen them tread the same path moving from post-war social democracy towards neoliberalism and more recently demonstrating an appetite for political intervention in the face of ever greater financialisation of property.
Australia is often held up as an example of property price inflation and particularly it’s household debt-to-income ratio, which stands at 211% compared to the UK’s 148% and the US level of 101% though these are not necessarily directly comparable when varying interest rates and institutional factors are taken into consideration.
The Australian market is analysed in an Oct 2024 Forbes report and bears the hallmarks and scars of policies and debt burden similar to the UK.
The Great Divide (by Alan Kohler) is an Australian’s view of other countries’ markets. Some of the book’s observations are reviewed here. What seems to be common to many of those countries that have the worst affordability is government policy that has stimulated demand while not addressing supply.
For example, the Netherlands ignored the British experience and freed-up sales of housing corporation stock (their equivalent to council housing). Unsurprisingly, some 25% of homes in the country’s biggest four cities are now owned by investors. Measures to help young buyers have ended up stimulating further investment buying. All of which has contributed to rocketing prices. The median home price in Amsterdam is more than 10x income.
In another parallel with Britain, far right politicians in the Netherlands are blaming migrants and asylum seekers for their housing crisis, yet a UN report debunks this viewpoint and argues that government policy has been the greatest influencer of both affordability and availability.
The photograph is of a housing development in Sydney.