A Reuters poll highlights concerns for homebuyers as 93% of analysts expect a worsening shortage of affordable housing globally, particularly for starter homes. The COVID-19 pandemic exacerbated this issue, making it difficult for first-time buyers to save for down payments. Rising house prices are expected in all major markets, except Germany, over the next two years. The US may see moderate increases due to low mortgage rates for existing homeowners, while the UK, Canada, Australia, New Zealand, and India will experience varying levels of price hikes. With 73% of analysts urging government intervention, addressing the affordable housing crisis is crucial.
A new poll by Reuters is a concerning issue for potential homebuyers around the world. Despite a global housing crisis, major markets are expected to see continued increases in house prices, with a significant shortage of affordable options further squeezing those looking to enter the market.
The poll reveals: 93% of analysts surveyed believe the supply of affordable housing will fall short of demand in the coming years. This lack of inventory is particularly acute for starter homes, a problem exacerbated by the COVID-19 pandemic. With limited choices and rising prices, many first-time buyers will face significant challenges saving for a down payment or may have to postpone their dream of homeownership entirely.
As private developers focus on high-end construction and homelessness rates climb in developed nations, the need for government action is becoming increasingly clear. A strong majority (73%) of analysts believe governments should take a more active role in improving housing affordability. This could involve measures like increasing funding for affordable housing projects, providing incentives for developers to build more starter homes, or regulating rent increases.
While the pace of price increases may be slower compared to historical highs, house prices are still expected to rise in all major markets surveyed (except Germany) over the next two years. Analysts predict interest rates will not return to record lows, with price appreciation likely to remain in the low single digits.
Despite the global trend of rising house prices, the impact varies across regions. The US is expected to see moderate increases (5.0% in 2024 and 3.3% in 2025) due to a unique situation: low mortgage rates for existing homeowners make them reluctant to sell, further tightening supply. In contrast, UK and Canada may see more modest gains (1.5-3% range), while Australia and New Zealand are forecast for price hikes exceeding inflation (around 4-5%). India stands out with a steeper rise (6.0% annually), driven by high-income buyers and investors, which widens the affordability gap for most Indians.
The lack of affordable housing options presents a significant challenge for millions of people who dream of owning a home. While some analysts believe interest rate cuts could provide some relief, most agree that substantial government intervention is necessary. Addressing the underlying supply shortage and ensuring everyone has access to safe and affordable housing must become a top priority to prevent a further worsening of the global housing crisis.
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