Short post- why is the housing market so bad world wide?

 Why have homes become so unaffordable?

Heres the video: https://www.youtube.com/watch?v=xpEBcSE9Ipc



  • How affordable a house is is calculated by finding the ratio between the median income and medien house price.
  • In top cities, this level is around 9 which economists call "severely unaffordable"
  • Demand has been far greater than supply.
  • Low interest rates between 1990s and 2000s have caused prices to surge and caused investors to buy homes for yields. Homes are a safe store of value/
  • The rise is alot down to the fact that houses have become investment vehicles rather than homes, with large institutions such as hedge funds buying them up. For example, private equity and companies such as legal and general, Lloyds, Blackstone.
  • Interest rates in 2021 to 2023 rose sharply: mortgages tripled in costs, developers stopped projects, and landlords raised rents to cover costs 
  • Covid caused massive supply side issues, and the derived demand of products such as labour to manufacture these goods surged
  • This has inflated the prices of houses.

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