Knight Frank, a global property consultancy, launched its inaugural Urban Futures report. Asia-Pacific has witnessed house price growth outstrip income growth in the majority of the region’s cities.
According to the study, the affordable housing gap – as measured by the difference between house prices and income – reached an estimated $740 billion globally in 2018, according to the newly published Urban Futures report 2019.
«With high levels of urbanisation over the last few years, Asia-Pacific has witnessed house price growth outstrip income growth in the majority of the region’s cities. A major objective for policy makers around the region is to address concerns around affordability. Some measures that can ease pressure on homebuyers include increased support for first time buyers, along with supply side measures and lending restrictions,» Nicholas Holt, Head of Research for Asia-Pacific, said.
Factors Influencing Housing Affordability
«As cities’ economic prospects improve, the importance of supporting affordable housing provision will come to the fore. Innovative solutions, coupled with new ways of city planning, can help to address some of the longer-term issues surrounding affordability,» he added. Factors influencing housing affordability globally include:
- Rapid urbanisation: According to the U.N., 55 percent of the world’s population lived in urban areas in 2017, up from 42 percent 30 years ago. This is expected to rise to 68 percent by 2050.
- Housing as a commodity: Since the financial crisis, housing has shifted to become a complex investment vehicle attracting huge sums from funds and corporations.
- Politics: The need to create more affordable housing is matched by governments’ desire to raise revenues.
- Supply: Land supply issues resulting from regulatory constraints.
