Closing the Affordable Housing Gap Could Cost $11 Trillion Worldwide

September 30, 2014 at 1:27 pm Leave a comment

This Bloomberg story highlights some preliminary results from an McKinsey & Co. study that explores the affordable housing challenges faced by governments around the world:

Replacing the world’s substandard housing and building affordable alternatives to meet future global demand would cost as much as $11 trillion, according to initial findings in a McKinsey & Co. report…

About 330 million households — about 1.2 billion people — now struggle with substandard housing, a number that may increase to 440 million in 11 years, McKinsey forecasts. Acceptable housing is within an hour’s commute of work and has basic services including flush toilets and running water, the report says…

The deficit presents an opportunity for construction companies — with some of largest markets in emerging economies such as China, India, Brazil and Russia. Mortgage lenders also stand to benefit; by 2025, the market for affordable-home loans could be worth as much as $400 billion a year, the report said.

Still, the biggest challenge facing policy makers is the cost and availability of land.

“Where land is available at a lower prices, on the fringes of the city, housing projects may fail due to lack of infrastucture” such as school, hospitals and access to buses and trains, the report said.


Entry filed under: Affordable Housing, Economy, Government Affairs, Housing Trends. Tags: , , .

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