Several countries are battling historic housing shortages and record-breaking price spikes. Three world leaders have different ideas for solving the crunch.
While several sectors still haven't recovered from their pandemic slumps, housing remains on an absolute tear. Lockdowns and the turn to remote work sparked an unprecedented demand for homes as people moved from densely-packed cities to suburbs, exurbs, and rural neighborhoods. Home prices surged higher, supply evaporated, and first-time buyers were trapped between frothy bidding wars and missing out on homeownership.
Governments waited throughout 2021 to see whether the market would heal on its own, but were met with more months of rising prices and strained supply. Recent announcements from the US, Canada, and New Zealand show policymakers finally stepping up, and reveal a range of potential solutions.
The home shortage has been particularly dire in the US, with home prices now rising at a record pace for four straight months. But other advanced economies are dealing with their own housing crises. The average home price in Canada is up 22% from July 2020 and has roughly doubled over the last decade. And in New Zealand, the lack of affordable homes has captured the attention of the country's human rights commission.
The three countries' plans for normalizing the market vary in size and scope. Where the US is mostly focused on shoring up supply, Canada is interested in fighting investor speculation. New Zealand is forging its own path and letting its central bank take unprecedented action to cool mortgage lending.
Here's how the US, Canada, and New Zealand are trying to fix their housing markets.