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   Jul 05

Housing affordability around the world offers no more security though goals are different

Australia is not alone in its housing affordability crisis.
Nanjing Night Net

Governments around the world have introduced policies or strategies to combat rising house prices that affect low to middle income earners.

Australia

Australians covet home ownership – “the great Australian dream” is in our DNA. Treasurer Joe Hockey’s advice to first home buyers is to get a “good job” that pays well. Top  economists expect prices to surge again before they plateau. The Victorian government is reviewing a proposal to introduce five to 10 year rental leases, akin to some cities in Europe.

Switzerland

The Swiss were able to cool their sizzling market without raising interest rates. Harsher home ownership rules were brought in, including limiting access to retirement funds as deposits and shortened mortgage repayment periods, which it was hoped would put a lid on debt growth. Housing in Switzerland is less vulnerable to volatility like severe prices rises because only 40 per cent of the population own property.

Singapore The Singapore government has a publicly sponsored housing construction program, which sells units and condos to consumers, targeting the lower-middle income group. Buyers can resell, subject to some rules around timing. This strategy of reacting to demand and releasing housing when needed is seen to help quell price rises. Foreign ownership is also restricted. Property prices have gone down.

England

The urban containment philosophy – to manage urban sprawl and create greenbelts of open land around cities – has often been blamed as a reason for rocketing real estate prices. Limited availability of land for development increases demand on existing housing supply. The government has brought in mortgage lending limits – the first policy of its kind in Britain in decades.

Germany

Home ownership is not as sought after or romanticised in Germany as it is in Australia. Germany has one of the lowest home ownership rates in Europe, about 40 per cent, and comparably stable house prices. It’s attributed to liberal release of land and secure tenancies for renters, which makes never owning a home an appealing prospect. Unlimited tenures – which offer security – are not out the ordinary.

Hong Kong

Property price growth has tracked at 170 per cent since 2008, which made Hong Kong one of the most costly cities in the world for home ownership. Here, it is not unusual for middle income earners to struggle to afford a flat. The government has periodically introduced new taxes to discourage foreign ownership, including an extra 15 per cent stamp duty for non-permanent residents.

Canada

The government is looking into solutions to tackle housing affordability. Vancouver is viewed as a global city and foreign property investment, from China to the Middle East, is rife. While foreign ownership is a contentious and murky topic, much as it is in Australia, international investment in Canadian real estate might provide a price correction when the bubble pops, some property experts say.

South Africa

In a country with enormous wealth disparity, the Finance Linked Individual Subsidy Programme (FLISP) helps low to middle income first home buyers, bringing in about AUD$370 to AUD$3500 a month, get on the property ladder. Families can get repayment subsidies of between (R10,000) $1000 to (R87,000) $9000. About R300,000 gets a very basic, single-storey, two or three bedroom house in a Johannesburg suburb.

Denmark

In Copenhagen late last year, apartment prices hit what local media called near “crisis level”. In the 2015 budget, the government introduced an agreement to give municipal mayors the right to set aside 25 per cent of development for affordable housing. Copenhagen mayor Frank Jensen said he hoped the rule would ensure that “nice neighbourhoods” could be enjoyed by students and “regular workers”, not just the wealthy.

United States

In New York, a 10-year plan is in place to provide or preserve 200,000 affordable homes. Mayor Bill de Blasio has attributed the housing affordability crisis to lack of stock, stagnant wage growth and increasing economic inequality. Low to middle income New Yorkers are targeted, with about 40 per cent of the 200,000 benchmark for building new budget housing, and the balance applying to protecting renters from landlord harassment and rental rises.

Brazil

Brazilians are facing a chronic real estate shortage, which is driving prices north. Up to a quarter of a million residents of the capital Rio De Janeiro are victims of the housing deficit, squatting or living life in slums. The government’s Minha Casa Minha Vida (My Home My Life) social housing policy was introduced in 2009, with almost 72,000 units finished or under construction. Of that, 35,000 are reserved for low-income families.

France

The French have sought to shore  up affordable housing in gentrifying areas of Paris. Dubbed “ghettos for the rich”, parts of the capital have become financially out of reach for low to middle income families. The city council – Conseil de Paris – last year released a list of 257 addresses, encompassing 8000 apartments, that it has first right of refusal to buy at market price, so that the apartments can be converted into government-subsidised housing.

United Arab Emirates

Luxury real estate is the staple of the market, but more and more residents – middle income earners – are wanting modestly priced homes nearer their work. According to Bloomberg, about half of those who work in Dubai cannot afford to live there, and commute from neighbouring sheikhdoms. The government is encouraging developers to set aside 15 to 20 per cent of housing for lower income buyers but it’s not enshrined in law.   DomainThis story Administrator ready to work first appeared on Nanjing Night Net.

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