Housing Costs Mount
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Bibliographic details
- Authors: MARTA DOROSZCZYK
- Published: December 3, 2024
Overview
- Article: "Housing Costs Mount" by MARTA DOROSZCZYK, F&D Magazine, December 2024.
- Central finding: After retreating during the global financial crisis, house prices have resumed their relentless rise, putting pressure on the poorest and increasing intergenerational strife.
Price and income trends
- Over the past decade, the cost of a home across the OECD’s mostly high-income countries has risen by 37 percent in real terms, according to the organization’s analytical house price indicators.
- Prices are up 16 percent relative to incomes, on average.
Generational effects and concerns
- Rising house prices are straining relations between the generations; younger people yet to get on the property ladder are more concerned than their parents.
- Survey results: 60 percent of OECD respondents aged 18–39 said they worried about housing affordability, compared with 38 percent of those aged 55–64.
- The generation gap was greatest in Ireland, Canada, and the United States.
Homeownership patterns
- Homeownership is highest in Eastern Europe’s former communist countries; example: 94 percent of Romanians own their home outright.
- Comparison: 5 percent of the Swiss own their home outright (as noted in the source).
Rental markets and burdens on the poorest
- On average, 16 percent of people rent from private landlords in the countries the OECD tracks.
- Colombia: 82 percent of renters in the lowest income quintile hand over more than 40 percent of their income to private landlords.
- Colombia’s rental market is noted as one of the least regulated.
Mortgage repayment burden on low-income homeowners
- Higher interest rates increase repayment pressures for homeowners with outstanding mortgages.
- Colombia and Luxembourg: more than half of the poorest who own a home spend at least 40 percent of their income on repayment.
Source: "Housing Costs Mount," MARTA DOROSZCZYK, F&D Magazine, December 2024; International Monetary Fund.
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