New international COVID-19 and housing report launched
Prof Ken Gibb outlines the key findings from a major international study entitled, COVID-19: Housing market impacts and housing policy responses – an international review, that compares national housing market impacts and housing policy responses in eight countries.
Over the last 18 months, the UK Collaborative Centre for Housing Evidence (CaCHE) has made a continuing distinctive contribution to the role of housing during the pandemic. We initially acted as a platform to convey the housing sector’s views (for example, blogs by Williams and by Teixeira and individual academic contributions such as Gurney and also Watson and Bailey). Subsequently, we have undertaken a number of specific CaCHE projects, several of which have published final outputs e.g. on homelessness, resilience and domestic abuse, with more are in the pipeline.
Today, we add a new international review that compares national housing market impacts and housing policy responses in eight countries. This project is a collaboration between the University of New South Wales (UNSW) and CaCHE. The project was led by Professor Hal Pawson, also a CaCHE international advisory board member, and the research was funded by a partnership between the Australian Council for Social Service (ACOSS) and UNSW. We are grateful to members of ACOSS who financially supported the project (Mission Australia, National Shelter and Queensland Shelter).
Over the last year, the research team has built up a picture of these market and policy dimensions for Australia, UK, USA, Canada, New Zealand, Ireland, Germany and Spain. We have interviewed more than a dozen in-country experts from the latter six nations (to whom we are very grateful). Across the piece, there are clear similarities and differences, as well as path dependencies and impacts of different policy settings and welfare regime starting points.
Here are some of the report’s key findings:
- Housing markets have experienced house price increases, in some cases by significant double-digit levels since lockdown. This has been most dramatically felt in the Anglosphere housing markets. By Q3 2021, annual house prices had increased by 22% in Australia and New Zealand, by 18% in Canada and the USA and by 12% in the UK and 11% in Ireland.
- This must in part reflect the remarkable income security and protection measures introduced in 2020 but it also belies underlying housing market pressures and differential capacities to transact and purchase in the ‘pandemic housing market’. It was also shaped by very low-interest rates and quantitative easing measures. It also suggests that specific interventions to support and maintain the housing market were not actually required (and were partly the result of pessimistic early market forecasts by official forecasting authorities and central banks).
- The international evidence repeatedly confirms the arguments that remote working and pre-existing income and wealth inequalities in several countries enabled shifts to larger detached homes often in more green suburbs; while also stimulating contraction in some central rental and ownership markets.
- We also found that in most countries, housing rents have increased significantly in a context where countries had also introduced temporary suspension of arrears-based evictions. By the end of 2021, rent increases were at their highest level since the GFC in the USA, UK and Australia.
- Germany and Spain contrast to the Anglosphere experience: a subdued housing market in Spain (with an economy disproportionately exposed to decline in tourism), and a robust pre-pandemic housing market sustained in Germany, in part by economic stability and their particularly strong income protection system (pre-dating the 2020 crisis).
The research covers a range of other important issues such as the response to homelessness, changing rental market regulation during the pandemic, and the emergency income protection and labour market measures. The report also considers the pace and timing of the unwinding of these housing and social security regulations.
The report concludes by arguing that this remarkable experience of focused intervention demonstrated a cross-national capacity to deliver for people through income protection, which helped meet the emergency needs of those either homeless or at risk and those facing arrears in the rental market. However, this has not, with a few rare exceptions, led to a long-lasting policy reset. Indeed, the inequalities of housing wealth and affordability will be reinforced by the large price and rent increases we have reported. Nonetheless, the experience suggests that such purposive intervention is still achievable and workable across quite different national contexts, and, moreover, the housing sector, can indeed play a strong redistributive and socially cohesive role, when called on.
Professor Ken Gibb is the Director of the UK Collaborative Centre for Housing Evidence.
Read the full report, COVID-19: Housing market impacts and housing policy responses – an international review.
Photo by Martin Sanchez on Unsplash
Date: March 22, 2022 7:00 am
Author(s): Ken Gibb
Categorised in: International, Markets