select
|

Rethink of housing supply essential for emerging economies

A report launched recently (Wednesday 26 March 2014) finds that the effective provision of affordable housing is a universal problem.

The most notable shortages of adequate housing are in the developing nations, where housing provisions has failed to keep pace with economic development.  In the advanced economies rising income inequalities and a tendency for housing costs to rise faster than incomes have posed major difficulties for younger and poorer households in finding adequate homes.

The research, presented at the RICS International Summit, held in São Paulo, by Royal Institution of Chartered Surveyors (RICS) President Michael Newey, investigates how housing demands, needs and supply in three of the BRIC economies, Brazil, India and China, have been affected by economic growth and compares the policies outlined by governments to meet the demands for housing. 

Commissioned by RICS and authored by a team led by Professor Duncan Maclennan from the University of St Andrews, the report includes recommendations to governments, academic researchers and international agencies on the need to focus more critically on the diversities within the BRICs and OECD (Organisation for Economic Co-operation and Development) nations to convey accurately how housing systems actually operate on a local scale.

Furthermore, findings suggest that there has been too great a focus on broad housing policy ‘visions’ at the national scale, rather than the feasibility of housing policies at a local level.

As a result the report argues for decision-makers to adopt locally effective policies, recognised and supported at a national level and implemented at neighbourhood, town and city level. 

The report also examined the current issues with existing housing policies across Brazil, India and China.  Evidence has found that a substantial focus on the creation of home ownership, along with a lack of attention being paid to the development of an efficient rental housing market, has led to a shortage in affordable housing supply.  This has been most apparent in Brazil and India, where limited housing supply has been exacerbated by lagging infrastructure provision, inadequate developer funds, long delays in the planning system and, in some instances, corruption. 

In Brazil and China, sluggish housing supply systems paired with deregulated housing finance markets, has created a housing market susceptible to booms, bubbles and busts and poor market stability.  However, in China, with public ownership of land and a past tradition of public housing provision, there is a record of stronger and effective policy action to deal with urban housing shortages.

Findings from the research also conclude that rapid urbanisation has led to a rise in informal settlements, particularly in Brazil and India.  The formation of ‘favelas’ (shantytowns) and slums, while providing shelter for those in need, can deter the development of quality housing provision; with slum and favela formation outstripping other major housing investments since 2006.

However, lessons can be learnt from the intimate links established in Brazil and China, between housing policy, urbanisation and infrastructure, which many OECD nations could benefit from. 

Comments Dr Clare Eriksson, Director of RICS Global Research and Policy:  “The research traces how housing provision and policies in Brazil, China and India have responded to economic growth.  Based on the study, recommendations are made for both BRICS and OECD (Organisation for Economic Co-operation and Development) economies to ensure more effective delivery of housing in the future.  Key findings stress the importance of improving supply, fashioning an efficient rental market, integrating housing and city development policies, and taking a contextualised and local approach to housing policy supported by adequate national frameworks and resources.

“Although some progress has been made, particularly in Brazil and China, the research highlights that much still remains to be done until sufficient levels of decent affordable housing are a reality. Over the coming months, RICS will be considering the role it can play in promoting this outcome.”

Report author, Professor Duncan Maclennan, says: “International bodies and lobby groups talk of the looming challenges of population ageing, the environment, worklessness, immigrations and the like.  They also need to recognise that there is an emerging global crisis in relation to the provision of decent homes and neighbourhoods.  Policy responses have been too little and too late in many countries and with deregulated finance markets a demand side emphasis on policies to support home ownership has shaped sluggish housing provision systems.  New times need a new emphasis on rental housing provision and for programmes to help the poor there will have to be a new, sustained government commitment of resources.”             


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Jun 2018
      In the current market, letting out a property can be a good option as rental demand remains strong, especially in the northern suburbs of Johannesburg. This is according to Chris Renecle, MD of Renprop. However he says that before homeowners let their property out, there are five key points they should make sure are covered before they market the property for rent and sign any lease agreements.
    • 19 Jun 2018
      The Capetonian dream is to live by the ocean with the iconic mountain making an appearance somewhere in the horizon. But, that dream comes with a hefty price tag that many simply cannot afford. But, should you venture some kilometres out of the city centre, entirely new realms of beachside bliss await you …
    • 19 Jun 2018
      Douw Steyn, one of the richest men in the country, recently allowed a rare glimpse into his Fourways Palazzo when it was featured on the SABC lifestyle programme Top Billing - and it is beyond your wildest dreams!
    • 18 Jun 2018
      Many home sellers are motivated to appoint estate agents because they know that the agency will carry the costs of advertising and marketing their property.
    • 18 Jun 2018
      When a property is sold when it has a tenant in occupation, the questions often raised are: “What happens to the tenant if the landlord sells the property?”, and what rights the tenant will have with regards to cancelling the lease or enforcing it, says Sunell Afrika, rentals manager for SAProperty.com.
    • 18 Jun 2018
      Sellers are often caught off-guard by the expenses incurred in the selling of a property. Just like there is no such thing as a free lunch, there is also no such thing as selling your property without incurring at least some costs.
    • 15 Jun 2018
      The second quarter of 2018 has proven to be the turning point for Midrand’s real estate market, especially the upper end which started to waver towards the end of a tumultuous 2017 with a notable drop in both sales and average selling prices.
    • 15 Jun 2018
      According to data recently released by FNB, the average age of a South African home buyer has increased from 38 to 44 this year. In an attempt to help first-time buyers enter the market sooner, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, walks us through the steps of saving for your first home.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK