📊 Homeownership more affordable than in 1980?
Recent reports claimed that ”#Homeownership right now is more affordable than in 1980”. The argument is based on the #OECDaffordabilityindex, which compares house prices to household incomes. On the surface, this sounds encouraging, but the picture is misleading.The problem: the index is too one-dimensional
🚨 It only considers price in relation to per-capita income. Financing costs (interest rates, loan terms, lending rules) are completely absent.
🚨It ignores the rental market, where millions of households live and where burdens have increased sharply.
🚨National averages disguise regional realities, living in Munich or Berlin looks very different from the country’s mean.
🚨 1980 is a distorted benchmark, because conditions were fundamentally different. Looking at 1990, for example, shows a very different dynamic, especially after German reunification.
🚨Key political and economic drivers such as ECB rate hikes, energy price shocks, construction cost inflation, regulation or migration flows are left out.
Yes, housing standards have improved, larger spaces, better amenities, more comfort. But blaming today’s affordability crisis on “higher expectations” ignores deeper issues: too little new construction, insufficient social housing, and rising building costs. Innovation is essential to lower costs and ensure real affordability. The OECD index offers context but not the full picture. Claiming homes are “more affordable than in 1980” oversimplifies the problem and overlooks today’s realities.At STYX, we believe in looking at topics from multiple angles! Stay tuned for another post on the same topic next week. 🔜
