Finding equitable access to housing as a shaky global housing market slides

By Jackie Edwards 
Property is a key facet of most economies, developed or otherwise, and the fortunes of a national housing market can be a key indicator as to wider GDP growth and economic health. It is with some trepidation, then, that economic analysts are predicting a 6% drop in global housing market value; one Goldman Sachs analysis is estimating a house price index drop will continue to hit countries worldwide, including the most developed countries. 

While this may seem like a potential positive, with homes becoming more affordable and rents reducing, it is rare that these savings are passed on to tenants. As such, it has become important for private tenants to explore new routes towards securing housing.

Facing the challenge

The current rental market being offered to those without their own home is one that requires a lot of effort to harness properly. The base level of accommodation out there is not of a good standard. UN reports suggest that up to 1.6 billion people globally are living in inadequate housing. There are, typically, better rates of adequacy in housing in highly developed countries. Indeed, the support networks available in more developed countries, where landlords and estate agents can help to link would-be tenants up with suitable properties and provide advisories on how to best ensure their needs are met. This is especially important within households where adaptations are needed to ensure accessibility to accommodation.
More needs to be done on a wider level, however. An assessment conducted by the US Department of Housing in respect of their housing market, one of the world’s most advanced real estate markets, produced worrying results. A majority of properties in the USA are not accessible to people living with disabilities, and require major overhauls to even be somewhat applicable to families with accessibility needs. The picture is not much better in other countries, and it is something that modern renters need to look out for.

Addressing rising costs

Despite the downturn in house prices and the observed impact that will have on the economy, there hasn’t been a linked reduction in rent prices. According to the Financial Times, apartment prices have spiked 18% globally since 2022, and previously affordable or unattractive areas in major cities are now becoming out of reach for most people. When considering that salaries have remained static in many countries, and inflation has pushed back the earning power of those people, this obviously puts a huge strain on renters.
There are some options on the way. In Europe, rent controls have been brought into place across multiple countries, though this has been seen as a controversial measure. To that end, the UK has rolled back their own promises, except in London. Elsewhere, social housing is being expanded rapidly in many developing countries, and some countries have broadened their view of who should qualify for income and rent support.

Looking to purchase

For those who are looking to purchase a home, the situation is a little friendlier, at least according to Reuters. The global outlook is brightening, according to the news outlet, with the reducing cost of housing making new buyers see an affordable situation. However, interest rates are impacting this.
Several financial analysts have noted a total, global, aggregate increase in interest rates. The biggest increases are being felt in the USA and UK as they seek to push back the impact of inflation; however, indications are that this will continue to push prices higher. As such, for those looking to get on the housing ladder via a mortgage, the situation isn’t quite as pretty. Moving into a fixed-rate mortgage at this point in time is likely to attract huge monthly payments; staying on a long-term variable rate is far from certain to be affordable.

Facing homelessness

As a result of these factors, homelessness is increasing. According to DevelopmentAid, while statistics are hard to track, studies suggest that the overall global homelessness rate will continue to rise. This includes street homelessness, or destitution, and other forms of homelessness, such as sofa surfing and sleeping in vehicles.
This, of course, creates a significant burden on state authorities. Most nations will have a commitment to providing support and housing for the greatest number of people, whether that’s through income support to maintain their housing or providing accommodation in itself to keep people off the streets. This will only exacerbate the housing situation. Arguably, action is needed today to head these issues off at the pass.

Addressing underlying issues

The key underlying issue that is impacting the housing market, and increasing both mortgage and rent prices, is the fragility of the global economy. It relies far too much upon the real estate market, it uses those house prices and assets as fodder for financial growth, and it has failed to change despite the two crises of 2008 and 2022. While these systems remain in place, it is hard to see how there can be a gigantic change in fortunes that will improve the global system.
For those looking to find affordable housing, however, there are options. The key principle is to look for progressive and forward-thinking providers who can help to find adequate housing, and help to link in with the relevant benefit providers. Mortgages are harder to get a clear view on, and it may be worth seeing if the current economic tumult will pass before committing.