Comprehensive, cross-national data on housing affordability, homelessness and public policies to make housing more affordable are key to understanding housing challenges and to designing evidence-based policies to make housing more affordable. The OECD gathers data to help countries monitor access to good quality housing and strengthen the knowledge base for policy makers.
Affordable housing
Across the OECD, people are finding it difficult to afford the cost of housing. Housing prices have eased somewhat in most countries since the height of the COVID-19 pandemic, but high borrowing costs are putting home ownership out of reach for many, and the outlook for renters is just as pessimistic. The housing challenge looms especially large for people with low or unstable incomes, youth, families with children and seniors, and homelessness remains a persistent challenge.
Key messages
Over 2 million people were officially counted as homeless across OECD countries, according to the latest government data. Nonetheless, homelessness remains hard to measure and compare across countries, due in part to large differences in how countries define and collect data.
Although many governments have put in place strategies and specific measures to prevent homelessness and to provide better support to people experiencing it, much more needs to be done to design, implement, evaluate, and scale up effective public policies. In particular, this includes a stronger emphasis on prevention, taking a ‘Housing First’ policy approach, and improved access to tailored support and wraparound services that address social, health and employment needs.
In response to the persistent housing crunch, a number of OECD countries have renewed commitments to invest more in social housing. Social housing – defined by the OECD as residential rental dwellings provided at below-market prices that are targeted and allocated according to specific rules (such as identified needs or waiting lists) – is, in many countries, an important means to provide housing to people who cannot afford it in the market. The sector accounts for nearly 28 million dwellings in OECD and EU countries, representing between 6 and 7% of the housing stock, on average. The significant cross-country differences in the scope, design and function of social housing suggest that a range of strategies will be needed to enable the sector to maximise its role in responding to the current housing crisis.
To boost investment in housing, a number of OECD countries have established revolving funds (or similar systems) to finance the construction of affordable and social rental housing. These funds channel part of the rents or loan repayments into new affordable and social housing developments. The key features in establishing and operating a dedicated funding mechanism vary widely across countries, such as the institutional set-up of the scheme, the funding and financing arrangements, and decisions around management and monitoring.
The OECD is supporting governments in the design and implementation of such funds – a key step towards expanding investment in housing and bolstering the supply of affordable and social housing.
Context
Real house prices
Real house prices have increased by over 40% over the past decade, on average across the OECD, accelerating sharply at the onset of the COVID-19 pandemic. While prices have declined slightly since their peak in early 2022, they remain well above pre-pandemic levels.
There are considerable cross-country differences. The most significant growth was recorded in Canada, Chile, Estonia, Iceland, Israel, Luxembourg, New Zealand and Türkiye, with an increase of over 75% between 2010 and 2022. Meanwhile, in over 20 countries, real house prices increased between 20 and 70% over this period. Belgium, France, Korea and Poland recorded much more muted growth, as prices increased by less than 14%. In contrast, Finland, Spain and particularly Greece and Italy are notable exceptions, as the only countries that saw a decline in real house prices over this period.
The burden of housing costs
On average, one in three low-income tenant households are considered overburdened by housing costs in the OECD, in that they spend over 40% of their disposable income on rent. In a handful of countries – Colombia, Chile, Costa Rica, Spain and the United States– more than half of low-income tenant households are overburdened by the cost of housing.
Meanwhile, on average, more than one in four low-income homeowners with a mortgage are overburdened by housing costs, although rates vary widely across countries. At one end of the spectrum, more than 40% of low-income mortgage-holding households are overburdened by housing costs in Chile, Colombia, Costa Rica, Finland, Greece, Spain, Sweden and the United States. At the other end of the spectrum, the rate is less than 10% for low-income homeowners with a mortgage in France, Lithuania and the Netherlands.
Public investment in housing
Over the past two decades, public investment in housing has declined on average across OECD countries, and particularly since its peak in 2009. Total public investment in housing and community amenities, a broad category that includes both public capital transfers and direct investment in many areas, including housing development, community development, water supply and street lighting, dropped by nearly 50% between 2009 and 2016. Total public investment in housing development alone was nearly cut by 90% between 2009 and 2016. However, since 2016, public investment in housing has slowly began increasing, despite remaining below the peak in 2009. Between 2016 and 2021, total public investment in housing and community amenities increased by roughly 40%.
