Major increase in housing costs globally

The OECD reports that after declining during the global financial crisis, house prices have rebounded strongly. Over the past decade, home costs in mostly high-income OECD countries have increased by 37% in real terms, with prices now 16% higher relative to incomes on average. This rise is straining intergenerational relations, particularly worrying younger generations who struggle to afford homes.

• 60% of 18-39 year-olds surveyed expressed concerns about housing affordability

• 38% of 55-64 year-olds surveyed expressed concerns about housing affordability

Disparities in homeownership rates reflect varying levels of affordability and are influenced by historical, cultural, and regulatory factors. For instance, in Eastern Europe, especially Romania, home ownership is prevalent, contrasting sharply with countries like Switzerland where ownership rates are much lower. On average, 16 percent of people rent from private landlords in the countries the OECD tracks. For the poorest, it can be cripplingly expensive. Below are the figures for countries where renters in the lowest income quintile hand over more than 40% of their income to private landlords – see also chart.

• Colombia – 82%

• Chile – 68%

• New Zealand – 55%

Additionally, higher interest rates pose challenges for homeowners, particularly in countries such as Colombia and Luxembourg, where a significant portion of low-income homeowners spend over 40% of their income on mortgage repayments.

Source IMF F&D Magazine December 2024

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