The pandemic has ignited the spark of a housing revolution around the world

  • The world is trapped in a housing shortage and governments are mobilizing to solve the problem.
  • The pandemic has sparked a global buying spree, but the lack of available housing has caused prices to skyrocket.
  • Millennials are asking for help as they risk being left out of the market as they reach their prime home buying age.

Potential buyers are at their wit’s end, and not just in America. After the pandemic revolutionized the real estate market – matching record prices – the next chapter in history is a revolt by homebuyers around the world, demanding a housing market that works for everyone.

The history of housing in America has echoed around the world. An intense buying frenzy at the onset of the pandemic rekindled domestic supplies, leading to bidding wars that drove prices up to record speed. At the end of September, Americans’ hatred of the US real estate market was the most intense since 1982.

Global home prices rose at the fastest pace in four decades through the first quarter of 2021, JPMorgan economist sayss. Shortages and strong demand have pushed up domestic inflation in Australia, New Zealand, Brazil, Germany, Korea and Turkey, to name a few.

The problem isn’t necessarily affordability, Logan Mohtashami, senior analyst at HousingWire, told Insider, noting that mortgage rates are at historically low levels around the world. The global market simply does not have enough housing.

“This is the discussion that gets lost. We are talking about an affordability crisis, but if we had an affordability crisis, none of that would happen,” Mohtashami said, referring to the surge in purchasing. of housing. “The real way to solve this problem is through the production of houses. You just have to build. “

The problem is, builders “don’t care about the housing shortage” and “they never will,” Mohtashami said. This is where activists around the world are demanding governments step in, as the market serves home builders, realtors and sellers, not the people who can afford to buy new homes. The shortage needs a structural solution, they argue.

And he needs a fix soon. The world stands at a critical juncture as Millennials – the largest generation of adults – enter their prime home buying years. The group’s finances have already been rocked by the Great Recession and COVID-19, leaving them further behind than previous generations. Failure to address the housing shortage could leave millennials permanently on the back burner.

As the housing shortage persists, authorities around the world are rethinking the market from top to bottom. The economic future of a generation is at stake.

The American generational war of the NIMBYs against YIMBY

Each country’s housing crisis is slightly different, as is each government’s response.

In the United States, federal lawmakers are proposing a historic building campaign. The $ 3.5 trillion spending program championed by President Joe Biden and Democrats in Congress includes $ 213 billion for affordable housing. The Ministry of Housing and Urban Development estimates that the plan could create more than 2 million homes and reduce a significant portion of the country’s 6.8 million housing deficit.

Perhaps this is a case where throwing money at the problem works, Mohtashami said.

“You really need the government to start paying people to build houses and not care about their margins. Then the production can take place,” he added.

At the local level, baby boomers and millennials on opposite sides of the problem – the haves and have-nots, essentially – have split into respective “not in my garden” or pro-development NIMBY and YIMBY camps. YIMBYs – short for “yes in my backyard” – have more momentum than ever.

Berkeley, Calif., Which pioneered exclusive and user-friendly residential zoning for NIMBY in the early 1900s, just returned to politics in March. Previously, the city limited the number of households per lot in terms that explicitly discriminated against minority communities, especially black residents, and now it is poised to allow in-demand areas to double their housing capacity.

The same type of zoning was banned statewide in September; it is estimated to create 700,000 additional units statewide each year, a huge change from the California average of just 100,000 new units each year.

Further efforts

Instead of a wave of construction, Canada is pushing for more targeted policies to support buyers. Prime Minister Justin Trudeau announced in August his intention to ban blind auctions, a process that prevents buyers from seeing other buyers’ bids.

The Prime Minister is also aiming to ban the purchase of Canadian homes for investment purposes, with financial companies increasingly criticized for the greater role they have played in the housing markets of major countries.

Across the globe, New Zealand Prime Minister Jacinda Ardern’s latest housing plan includes tougher rules for investors selling homes they don’t live in, and she has ordered the central bank to New Zealand officially examines house prices when setting interest rates. The move marks a major shift for a central bank and suggests that other countries may start to factor housing into the way they set monetary policy.

Activists in Berlin want the government to buy housing itself. In the municipal elections in September, a majority voted for the government to buy apartments from the country’s largest landlords in order to boost the supply of public housing. The rule could affect up to 240,000 Berlin apartments.

Whatever happens from here, one thing is clear: Homebuyers want a new housing policy from their governments, and governments are listening.

About Natalee Broderick

Natalee Broderick

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