Friday 29 Mar 2024
By
main news image

Home ownership levels are continuing to drop in many countries despite the stable and positive outlook for most mortgage markets, Fitch Ratings reported in its latest annual Global Housing and Mortgage Outlook.

“As a result of market dislocations post-crisis, home ownership levels face challenges as large foreclosure pipelines are expected to displace owners in some countries, such as the US, Spain, and Ireland, while new lending remains well below pre-crisis levels, particularly in the eurozone periphery.

“Stretched affordability, especially in Australia and parts of the UK, and a growing preference for renting, are also having an impact,” Fitch said in a summary on its web. The percentage of homeowners in the US has fallen to 65% from 69% in 2006, while in the UK, this has fallen to below 65% from 73% in just six years.

The ongoing affordability pressure in Australia is likely to continue making renting an attractive option, relative to buying, said the global rating agency. It noted that the ratio of homeowners in Australia had fallen to 67.5% in 2012, from 70.7% in 2000.

Tight credit availability and stretched affordability should continue to lead to falling home ownership levels in many countries around the globe, with first-time buyers largely priced out of the market, said Fitch’s report.

“Supporting factors for the expected improvement in the mortgage market include better macro-economic conditions, low interest rates; and for some markets, improvements in affordability,” the report stated.

The main emerging threats are the prospect of rising interest rates for some markets and deflationary pressures in the eurozone. Gradual rate rises are expected in the US and the UK.

The report covered an assessment of housing in 22 countries.

      Print
      Text Size
      Share