Real Estate Facts: The Global Housing Affordability Crisis Continues to Worsen

The global housing affordability crisis continues to worsen due to the lack of supply, especially affordable housing.

The global housing affordability crisis continues to worsen due to the lack of supply, especially affordable housing. It has become a growing concern for many cities around the world, and according to Goldman Sachs, home prices continue to decline and could fall up to 20 percent in some countries. This is an alarming trend that could have a severe negative impact on people's ability to own a home.

The issue here is not just limited to the price reduction of homes but the crisis of housing affordability that comes with it. The housing shortage could worsen before it improves, as highlighted by the United States Housing and Urban Development report in February this year. High inflation due to the lack of supply results in higher interest rates, negatively impacting the number of homes available for sale.

Real Estate Facts: The Global Housing Affordability Crisis Continues to Worsen

The United States is not exempt from this crisis. Investors, instead of buying apartments, are now buying single-family housing, making it harder for many families to own a house. Many homes are being sold privately between the owner and the buyer. This situation, coupled with the lack of necessary amenities, such as building materials, and foreign investors competing for homeownership, exacerbates the housing crisis.

Localized solutions, as necessary as they are, are not enough to address the global housing crisis. A more holistic approach is required to remedy the situation and prevent a worsening of the current housing shortages. One solution could be to build residential complexes where people can access all amenities within walking distance. This approach not only eases the affordable housing crisis, but it also helps cities grow.

According to Smart Growth America, just 1.2 percent of land in the 35 largest US metropolitan areas comprises residential complexes. However, these residential complexes contribute 20 percent of GDP. Hence, building more residential complexes could be the key to solving the global housing crisis.

The global housing affordability crisis will not go away without a concerted effort to build affordable housing or create initiatives that support home ownership, and governments, investors and the private sector should work together to address this issue urgently, else it will spiral out of control.