Housing and Mortgage Markets in Turbulent Times: Is Australia Different?

This paper presents an account of recent housing and mortgage market developments in Australia viewed from a longer-term perspective. It is argued that Australian housing drivers and outcomes are, to some extent, unique, enabling the sector to withstand the fall-out from the global financial crisis to date. However, they have resulted in increasing problems of housing stress for lower-income and younger households who are finding it increasingly difficult to access homeownership and are facing significant affordability problems in the private rental market. The paper casts forward to the next 20 years, outlining both a ‘positive’ ‘business-as-usual’ scenario characterized by buoyant housing demand and strong national economy, and a ‘negative’ scenario marked by stalled economic growth and a sharp downward correction in housing prices. Under both scenarios, it is suggested that addressing the housing affordability gap will remain a major policy challenge.     

Housing Policy,Housing Assistance and the Wellbeing Dividend: Developing an Evidence Base for Post-GFC Economies

This paper discusses the recent evolution, at a time of turmoil within global financial markets, of Australia's housing system and considers the effectiveness of housing assistance responses formulated to assist lo- income Australians. Following the Global Financial Crisis (GFC), housing was recast in the public and political consciousness and received substantial policy attention. In this era of rapidly declining housing affordability as well as threats to the supply of housing finance, the Australian Government renewed its approach to housing assistance. The paper examines housing assistance in Australia and assesses individual outcomes in terms of a ‘wellbeing dividend’. It draws upon on a survey of 1700 low-income households to examine individual outcomes for health and wellbeing across three of Australia's major forms of housing assistance. The research clearly shows that while housing assistance makes a positive contribution to wellbeing, not all forms of assistance are equal.     

Political Economy and Housing in the Twenty-first Century – From Mobile Homes to Liquid Housing?

The recent Global Financial Crisis started as a crisis in the US sub-prime mortgage market, and rapidly spread to a wider financial crisis. This article suggests that beyond the crisis, we can now see that households are playing an evolving role as a site of risk absorption. In so doing, households have become a frontier of capital accumulation, not just as producers and consumers, but also as financial traders. Households are increasingly buying financialized products as an ordinary part of daily subsistence – houses, insurance, education, electricity and mobile phones. But at a level beyond the household’s daily reality, these regular purchases are being re-specified as assets, on which asset backed securities are built and then traded. It is in this way that by securitizing mortgage debt, finance has given global liquidity to housing. The size of securitized markets on housing as well as household assets and payment streams now dwarfs stock markets. The requirements of this emergent financial citizenship for the house and households extend beyond just honouring payments on a home purchase, it is requiring a culture of financial calculation that becomes absorbed as part of the daily norms and dispositions of social being. The presumption of rights of access to housing, education and health care are being replaced by the acceptance of individual financial participation and calculation. Here, we argue housing is being reconstructed as both the capital base for, and site of, individualized life course risk management.     

Home ownership,foreclosure and compulsory auction in the Federal Republic of Germany

This paper outlines the financial difficulties which home owners in the Federal Republic of Germany (FRG) have been experiencing over the 1980s. The discussion is preceded by a brief outline of the housing market for owner‐occupied dwellings. The paper then outlines the scale of the problem of home owners in financial difficulties and refers to house prices, housing finance and state subsidies. The extent to which the growth of home ownership has brought owner‐occupation within the reach of middle and lower income households, and the particular conditions of the housing market which affect those home owners who run into financial difficulties are considered. Reference is also made to research which has been carried out into the particular plight of households threatened with compulsory auction proceedings. In the conclusion possibilities for reform of housing finance arrangements and compulsory auction proceedings are outlined.     

Housing Pathways of Skilled Migrants: Indian Professionals in Helsinki,Finland

Abstract

Although relatively understudied, the role of affordable and acceptable housing in the accelerating global competition for talent is of utmost importance, especially if highly skilled migrants are to be absorbed into the permanent labour force. This paper concerns the housing of skilled Indian migrants in the Helsinki metropolitan area in Finland, and contributes to the literature on international migration and the housing of ethnic minorities. It presents a case study on how to analyse migrants’ housing pathways, examining the meaning of housing in the transnational lives of this relatively affluent migrant group. The results show that homeownership is a not a simple indicator of commitment to the host society, and that those responsible for national housing policy need to ensure the supply, quality and reasonable price of accommodation in order to fulfil the housing needs of skilled migrants.     

Building social mix by building social housing? An evaluation in the Paris,Lyon and Marseille Metropolitan Areas

In France, social housing is perceived as an instrument for promoting social mix. In particular, there is an expectation that introducing social housing into wealthy areas will bring in low-income households and lead to greater coexistence between lower and higher socio-economic groups. However, several factors tend to hinder the pro-mix effects of social housing: financial constraints that reduce the number of new buildings, especially in high-income neighbourhoods; Not in my backyard attitudes in wealthy areas; allocation practices by social landlords who seldom rent dwellings in expensive neighbourhoods to poor households. Previous experiments with social housing have often proved disappointing in their impact on social mix. What about today’s experiments? Has the social housing built in recent times increased social mix? The empirical evaluation we carried out in Paris, Lyon and Marseille shows that recent social housing developments have stimulated social mix but the impact measured is very small.     

Housing finance for lower income urban households in Zimbabwe

Housing finance systems in developing countries have been the subject of considerable international agency research and lending attention in recent years. The lack of availability of finance for public sector housing programmes and for the purchase of construction of housing by all income groups in urban areas is typically a major constraint on the ability of supply to meet demand. However, national efforts have often not dealt systematically with the housing finance system as a whole. The housing finance system in Zimbabwe is described and critically analysed in this paper, paying particular attention to the provision of funds for local authority housing programmes for low income residents, the place of housing finance institutions in the national finance system, the ability of the building societies to attract savings, and their lending programmes. The results of government measures to transfer responsibility for lending to low‐income households from local authorities to the building societies since the mid‐1980s are evaluated. It is concluded that Zimbabwe has an unusually well‐developed financial sector and housing finance system for a recently independent developing country. Although this evolved to meet the needs of the settler population, the extension of its activities into lending for low‐income aided self‐help housing was successful, within limits. However, events of the early 1990s demonstrate the vulnerability of such a system to the changes accompanying liberalisation. Suggestions are made for further possible reforms and the importance of monitoring the effects of economic liberalisation on the system and its beneficiaries stressed.     

Housing tenure choices of rural migrants in urban destinations: a case study of Jiangsu Province,China

In China, rural migrants to urban destinations often experience poor living conditions and a low rate of homeownership, which are viewed as the results of urban institutional restrictions. Previous studies have primarily focused on rural migrants’ living conditions and comparisons of housing tenure between migrants and local citizens in large, high-level cities. However, the status and determinants of housing tenure choices of rural migrants in urban destinations other than large cities are generally overlooked. Moreover, several factors, such as rural landholding and migrants’ intention, are rarely studied. Using data from a 2010 survey conducted in Jiangsu Province, multinomial logistic regression models are adopted to explore the features and determinants of rural migrants’ tenure choices in urban destinations. In addition to the urban institutional scheme and housing market, rural land and migrants’ intention are found to play important roles in tenure choices of rural migrants in urban destinations.     

Housing supply in Ghana: a study of Accra, Kumasi and Berekum

This is a study of housing supply in three urban areas in Ghana: Accra the capital city, Kumasi, the most important provincial city, and Berekum, a small town. The sample of over 1600 households is divided into renters, recent owners, and longer established owners. The last group is divided into those who have and those who have not extended their home in the previous 6 years. The data provides an insight into who is supplying houses (and extensions), what sort of housing they are building, their reasons for building and the problems encountered in achieving ownership. The study shows that house ownership is available to much lower income households than expected, especially when traditional compounds are built; that owners are relatively old, have large households and occupy considerably more rooms than renters, and build houses larger than they need and let the remainder to tenants or relatives. There is a great need for housing finance because land is currently inappropriate for collateral against a building loan. Research is needed to develop a means by which land could be used as collateral for a loan without unravelling the customary non-marketability of land.     

The housing careers of black middle-class residents in a South African metropolitan area

Under apartheid, black African households could not own land or homes in most major urban centres in South Africa. This limited residential mobility and locked many households into state rental accommodation in townships. Homeownership for all South Africans was restored in the mid-1980 s and the Group Areas Act was repealed in 1991. Democracy opened up economic opportunities previously unavailable to black people. This paper investigates the effect on black middle-class South African households’ residential mobility and housing careers. A retrospective cross-sectional survey of 244 such homeowners in the Mangaung Metropolitan Municipality determined their last five housing states. Changes in housing state indicated a steady improvement in housing quality, but tenure changes were not necessarily unidirectional—some had reverted to rental. More than 85% of the study participants had used mortgages to finance their housing career. Very few had financed their housing using own savings, an inheritance, or sale of a previous house, and not many had used the government subsidy. We found that housing careers are bridging the historical spatial racial divide in this municipality.     

Reframing the ‘gap market’: lessons and implications from Cape Town’s gap market housing initiative

In South Africa, households which earn too much to qualify for South Africa’s impressive capital subsidy programme and too little to access mortgage finance are referred to as the gap market. As the gap continues to grow, address is of increasing policy priority, a focus of local and national efforts. However, this paper argues that the gap market has been misunderstood and inappropriately framed in South African housing policy discourse. The case study of the City of Cape Town’s ‘Sale of Serviced Erven for GAP Market Purposes’ demonstrates the assumption that the gap market is a functional housing submarket which can be targeted uniformly. This paper argues that the gap market is instead a derivative of South Africa’s housing policy history and premised on the problematic ‘ownership imperative’. While the gap market is a useful conceptual tool to be understood within its historic trajectory, it should be discarded from policy design processes and replaced with more useful categories driven by analysis of the households and dynamics which comprise the market. This argument is relevant for all countries which seek to address gaps in their housing markets.     

More and better credit: Housing policy reform in Bolivia

Access to financing for housing in Third‐World countries is in very limited supply and formal‐sector housing finance is only available to a small proportion of the (higher‐income) urban population. Typically, the great majority of households in developing countries rely entirely on their own savings. Since investment by owner‐occupiers is usually three to four times their annual incomes, the inability to borrow against future earnings using the house as collateral prevents them from satisfying their housing needs and inhibits investment in housing. Consequently, a variety of lending policies and practices have been suggested and attempted in many countries to make housing finance more accessible to borrowers. This paper describes recent attempts by the Bolivian government to improve the supply of funds available for low‐income housing credit through the examination of the Fondo Nacionale de Viviendas Sociales (FONVIS), an entity designed to improve access to mortgage credit among low‐income households and funded through a mandatory payroll tax. The impact of FONVIS on problems of affordability and housing supply is estimated using data from the organization's data banks as well as those culled from recent household surveys. In addition, the paper includes a discussion of the most salient problems with FONVIS’ current procedures and regulations, such as its unnecessary control over housing design standards and the exclusion of informal‐sector workers. The paper concludes with recommendations regarding how to make FONVIS more responsive to the housing conditions of the poor, assuming that the current administration wants to continue using a mandatory payroll tax to support the credit market.     

Rental housing policy in England: post crisis adjustment or long term trend?

The UK Coalition government, formed in 2010, has set in place major housing policy reforms. Its objective is in part to address the country’s structural deficit, but also to rationalise the housing finance and welfare systems to ensure that assistance is more directly targeted and better value for money for government. Many commentators see these reforms as new and draconian while others regard them as just one more set of incremental changes in line with trends over the last four decades. This paper addresses this question by examining both long term trends in housing finance and policy and structural changes as they have affected the rental sector, particularly those shifting the balance between supply and demand side subsidies. The evidence suggests that the majority of changes over the longer term have been bi-partisan and have reflected economic tensions as much as political ideology. The biggest difference in current policy is not in the continuing shift towards demand side subsidies but more in the extent that lower income households will be expected to make larger contributions to their own housing costs. Whether policies on either the supply or the demand side will be fully implemented remains to be seen.     

Deconcentrating Poverty Through Homebuyer Finance Programs

Abstract: The federal government attempts to reduce the spatial concentration of the poor through the implementation of its many housing initiatives, guiding recipients toward economically integrated neighborhoods. Merging HMDA, GSE, and Census 2000 data, this analysis assesses the extent to which the government's homebuyer finance programs have accomplished the deconcentration of the poor. The research finds that the expected benefits of various forms of housing assistance have not fully materialized. The efforts to help very low‐income homebuyers are helping these households move into economically integrated neighborhoods but the movement toward this economic integration, especially by racial and ethnic minorities, has fallen short of distributing these households in a manner that parallels the availability of affordable housing in the market.     

Swedish welfare state and housing markets: under economic and political pressure

Economic and financial crises are often connected to crises in the housing market. Some housing systems are, however, more sensitive than others. Traditionally, Sweden’s system aimed to protect households from such volatility, but changes in the welfare state model and increased mortgage indebtedness suggest that Sweden’s housing market might have become more exposed to macro pressures. The starting point for this article is an understanding of the Swedish welfare state model in which housing was traditionally a core value and where the link between income and housing outcome has been weakened. Deregulation and liberalization have fundamentally changed the special features on the Swedish housing market. In particular, the rental sector is decreasing in favor of increased ownership and greater speculation. In this article, we aim to give a picture of the grand restructuring of the Swedish housing sector including its implications for the link between income poverty and housing poverty and an understanding of the contradictory reaction of the welfare state to the global financial crisis (GFC). Our results show that affordability is a problem and that the proportion of households at risk of poverty has been increasing when taking housing costs into consideration. However, a combination of the lessons learned in the 1990s crisis and resultant increases in regulation together with a stronger and more immediate recovery than might have been expected meant that Sweden and its housing system came out of the GFC fundamentally intact. However, there must be concerns that future crises will not be so readily addressed.     

Protecting housing and mortgage markets in times of crisis: a view from Australia

Australia emerged relatively unscathed by the foreclosure crisis in the US in 2007 and the subsequent global finance crisis (GFC) and, at least to date, appears to be well placed to face the sovereign debt crisis that has threatened and continues to threaten stability in a number of European countries. In part, its survival period can be attributed to a number of key interventions in its mortgage and housing markets prior to, and during, the GFC. Its apparent survival beyond 2010 and through subsequent crises has been built on these foundations. This paper provides an overview of the Australian housing finance system in order to understand some of the context within which these key interventions were undertaken. It outlines relevant responses to the crises and assesses the extent to which these have been successful in terms of their impact on Australia’s housing and mortgage markets. It argues that some of the interventions have been good and some bad but that even the good interventions reflect missed opportunities likely to affect Australia’s housing and mortgage markets into the future. It concludes by pointing to the lessons that might be learned from its experience to date.     

欧洲住房金融改革对中国的借鉴意义

自从1960与1970年代以来,更多的欧洲国家放松了它们的住宅政策。我们注意到从公共融资向私人融资的转变、从社会住宅向商业住宅的转变、从住房建设补贴向住房人头补贴的转变、从管制租金向市值租金的转变、以及从租赁房向自有房的转变。大部分这些转变都可以统称为＂私有化＂以及＂自由化＂这些定义不明的词语。然而,欧盟大部分国家的住宅金融体系仍然复杂而不合理,需要更多的住宅金融改革。我们将详述一种住宅金融改革的核心内容,包括如下几点：住房建设补贴、租户的住房人头补贴、自有房的税收优惠、房屋租赁政策、以及住宅联盟的角色。通过这种分析,我们勾画出欧盟国家住宅金融深入改革的轮廓。在不久的将来,中国也会考虑相似的住宅金融改革。     

House for Sale? The Self-help Housing Market in Pereira,Colombia

This paper aims to contribute to the discussion of the nature of the self-help housing market by analysing its extent and mode of operation in four self-help settlements in the intermediate sized city of Pereira, Colombia. The evidence from the survey settlements suggests that the market for self-help houses is small. Self-help settlements are dominated by a land market rather than by a housing market, although the distinction between the two is far from clear cut. Few self-help houses enter the property market because: many self-help households have no intention of selling their house after all the hard work that went into building it; it is difficult for households who wish to purchase dwellings in self-help settlements to raise the necessary finance; and the lack of title deeds is probably also a limiting factor.     

Housing entry pathways of refugees in Vienna,a city of social housing

This article presents the findings of an empirical study investigating refugees’ difficult entry into Vienna’s ‘tight’ housing market. Arguing that newcomers’ access to housing can be better understood by a closer look at the actors involved in the housing search process, an actor-centred approach is used. Complementing the constructivist pathway framework with a model of search based on Bourdieu’s theory of practice, four types of housing entry pathways could be identified. This study draws on semi-structured in-depth interviews with forced migrants who arrived in Austria in recent years. The analysis of newcomers’ housing entry pathways not only sheds light on the coordination structures at work in a city of social housing, but also on ‘good’ and ‘bad’ rental housing submarkets that have emerged in the course of the recent refugee movement. The paper concludes that a high proportion of social housing does not provide any indication that newcomers are granted better access to secure affordable housing.     

Affordable housing finance companies in India: how do they ‘differently’ serve the underserved?

Abstract

Over the years, the importance of access to affordable finance has inevitably been recognized as a critical component of developing the third world. Against the backdrop of huge under-penetration of the housing finance sector in India, this study reflects on the functioning of Affordable Housing Finance Companies (AHFCs), which are among the important stakeholders providing affordable housing loans to the low-income segment households. However, the process through which these new entrants have been able to down-market housing finance remains a black box till date. In light of this research gap, this study proposes a conceptual model that succinctly captures the business process of AHFCs across three main dimensions: Outreach Approach, Lending and Underwriting Practices and Risk Management Interventions. This model reflects on the kaleidoscope of process innovations that the AHFCs have embraced to cater to the housing finance needs of the low-income customers, while achieving profitability and social impact.