A/67/286 the member States of the Organization for Cooperation and Development (OECD), with the exception of Germany and Switzerland. 13 8. The need for housing finance systems was quickly identified as a crucial element in this transformation. Housing finance refers to financial policies and programmes that aim to finance the cost of housing for individuals and families by providing loans (mortgages or microloans) or grants (subsidies or tax exemptions) for the purchase, rental, construction or improvement of housing. 9. The majority of housing finance policies and strategies currently employed are targeted towards individuals rather than institutional landlords, aim to promote ownership, and are based on the premise that the housing market, if properly designed and regulated, and with the necessary supporting legal and institutional framework, is capable of ensuring access to adequate and affordable homeownership for all. 10. Housing finance is now perceived not only as a tool for promoting access to adequate housing but also as critical to the development of the financial sector, and has become a central pillar of the financial market, expanding the terrain for global capital. 14 The deregulation, liberalization and internationalization of finance that started in the 1980s had major implications for housing and urban development. Funds for mortgage lending now derive from national and international capital markets and not solely from existing savings and retail finance. These developments have been characterized as the “financialization” of housing”. 15 11. This process has been accompanied by the conceptual transformation of adequate housing from a social good into a commodity and a strategy for household wealth accumulation and welfare security. Housing has become a financial asset (“real estate”), and housing markets are increasingly regulated so as to promote the financial aspects rather than the social aspects of housing. The real estate sector is perceived as a potential driving force for continued and sustainable economic growth. 16 12. Yet, market-based housing finance has contributed to a widespread bubble in real estate prices and a decrease in affordability and has done little to promote access to affordable adequate housing for the poorest. Between 1997 and 2004 average housing prices grew by 149 per cent in Spain, 139 per cent in the United Kingdom, 187 per cent in Ireland, 112 per cent in Australia, 65 per cent in the United States and 227 per cent in South Africa. 17 As real estate prices and rents increased and came to be financed through global instead of local financial surpluses, more households faced difficulties in accessing adequate housing in the market. Many observers have pointed to the negative impacts of housing asset __________________ 13 14 15 16 17 12-45918 Spain and Ireland lead with 83.2 per cent and 91.4 per cent, respectively. D. Andrews and A. Caldera Sánchez, Drivers of Homeownership Rates in Selected OECD Countries, OECD Economics Department Working Paper No. 849 (Paris, OECD Publishing, 2011), p. 9. ECE, Policy Framework for Sustainable Real Estate Markets: Principles and guidance for the development of a country’s real estate sector, Geneva, 2010 (ECE/HBP/147). Manuel B. Aalbers, “The Financialization of Home and the Mortgage Market Crisis”, Competition and Change, vol. 12, No. 2 (June 2008), p. 148. World Bank, Housing Finance Policy in Emerging Markets, Loïc Chiquier and Michael Lea, eds., (Washington, D.C., 2009), p. xxxiv. UN-Habitat, Financing Urban Shelter: Global Report on Human Settlements 2005 (Earthscan, 2005), p. 1. 5