Finding an affordable place to call (one’s) own is not just a concern for millennials in the developed world. It has become a global problem, affecting everyone and becoming the main obstacle to growth.
But there are actions we can take, experts gathered at the Real Estate Development Summit Asia 2019 in Bangkok Thailand, said Friday at a panel called “Is the gap between demand and supply bridged? “
Ongoing rapid urbanisation has the potential to improve the well-being of societies. Although only around half the world’s people live in cities, they generate more than 80% of Global Domestic Product. And as cities become more economically powerful, the demand for urban property is rising residential property prices. Asymmetrically, residential development as an investment vehicle has led many cities to an oversupply of luxury property and undersupply of affordable units. Cities around the world, from New York to London to Kuala Lumpur to Seoul, are struggling to solve the growing affordable housing demand. Acute shortages are persisting despite billions of money invested and hundreds of thousands of units built. It has been defined as the “Global Housing Crisis” and leads to the so-called urbanisation without growth, a problem that has happened again in recent history.
One of the top issues raised by panellists was the assertion that inadequate policies on public housing and problematic land-use policies have worsened the disparity between demand and supply. “It’s not difficult to see why, if you look at the business model,” said NEAPOLI’s Hans Weemaes. “We have a business model that has, over the years, treated housing merely as a place to park capital. Housing has become a financial commodity, deprived of its connection to community and dignity of home-making.”
Market-oriented solutions to prevent affordable housing crisis could include lowering the cost of land, construction, operations, maintenance, and financing. Policymakers, working with the private sector and local communities, need to set clear ambitions for affordable housing throughout their cities.