Rising real estate prices are forcing people around the world to give up hope of getting a home, and this is the situation in many countries around the world, writes Bloomberg.
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This is a phenomenon that has been winged by a pandemic, and it is not just about buyers, as rents are rising in many cities. As a result, the common problem of housing costs has become an acute housing inequality, and a whole generation is at risk of being “overboard”.
“We are experiencing the exclusion of part of society from certain parts of our city because apartments can no longer be afforded,” admits Berlin Mayor Michael Miller. “This is happening in London, Paris, Rome and now, unfortunately, the trend is becoming more pronounced in Berlin,” he added.
This exclusion is rapidly making the housing market a new policy issue with unpredictable consequences. The leader of the German trade union “Ver.di” has called the rent the equivalent of the price of bread in the 21st century, which is a historical cause of social unrest.
Politicians have mentioned various possible solutions to the problem, ranging from rent ceilings to special taxes for landlords who, for example, convert vacant office space into housing. However, there is as yet no evidence of an easy or sustainable solution to this situation.
In South Korea, for example, President Mun Jane’s party suffered a blow this year in the mayor’s election after failing to prevent an increase in the average apartment price in Seoul since taking office in May 2017. The leading opposition candidate in next year’s presidential election has warned of a possible collapse of the housing market as interest rates rise.
in the same way China has tightened restrictions in the real estate sector this year, and there is talk of the role of real estate tax in lowering prices. The cost of apartments in July was 43.5 times higher than the average salary of the population, which negatively characterizes President Xi Jinpin’s efforts to achieve “common prosperity”.
In turn Canadian Prime Minister Justin Trudo has promised to apply a two-year ban on the purchase of property by foreigners if re-elected.
The pandemic has pushed new records in global housing markets over the past 18 months, driven by low interest rates, a lack of housing construction, changes in household spending and fewer housing sales. Although the situation is beneficial to the owners, the situation becomes difficult for potential buyers.
“We are experiencing a significant event that should not be shrugged or ignored,” said Don Leithon, former head of US mortgage giant Freddie Mac.
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