After working on this in many countries over the last thirty years, including writing several national housing strategies - my opinion has firmed that despite all the problems, the only guaranteed method of producing affordable housing in low-middle income countries is direct government production (possibly through NGOs). There is nothing like a Million-houses program to build a million houses (or three million in Brazil).

Demand-side subsidies are hopeless wherever they have been tried. If too liberal - they just increase the price of housing and with a multiplier. Too targeted - they bog down in compliance and never meet targets.

Affordable housing is dependent a great deal on non-housing policy - planning, immigration, federalism, population distribution. It is very easy for the system to go haywire. In general - more supply than demand, you can't go wrong, too much demand you can't go right.

Places like Texas where there is no planning, and housing finance is controlled are very affordable (the US supply subsidy schemes have also worked surprisingly well). The worst of all are places with tight planning controls, attracting population and with lots of funds for the wealthy to access - California, Australia, London. German housing is also extremely affordable, if not very good, because of the presence of all the corporate housing providers. This may change under the pressure of immigration.

The issue of housing affordability requires both macro as well as micro level government intervention.

At macro- level: tax intensity on construction materials/equipment, subsidy, tax on house rent, land and land market condition,

At micro- level: labor price of construction sector, relative price of construction material,

etc.

Hence, the price of house and its affordability depends on how the government tries to play in conditioning the above parameters.

This is a domestic issue, not an international issue. Sobthere is no international context. Housing subsidies by the state, like any subsidies, is a state intervention in ghe market. Housing cost as dictated by the market is "affordable" unless income inequality is so great that a significant segment of the population cannot afford it. State welfare or housing subsidy is just a short term remedy to shove the real problem under the rug. If housing supply is adequate, it would be affordable. Urbab concentration of people may artificially drive up housing cost. The state could beter spend that tax money to build more houses rather than sustaining an over-priced market.

Paul: I think teaching people how to budget their income would help tremendously. Rent or mortgage is a major expense, but many people lack budget skills. I recently read that 70% of American households live month to month. People need to know how to budget their money so they can better distribute their monthly income.

After working on this in many countries over the last thirty years, including writing several national housing strategies - my opinion has firmed that despite all the problems, the only guaranteed method of producing affordable housing in low-middle income countries is direct government production (possibly through NGOs). There is nothing like a Million-houses program to build a million houses (or three million in Brazil).

Demand-side subsidies are hopeless wherever they have been tried. If too liberal - they just increase the price of housing and with a multiplier. Too targeted - they bog down in compliance and never meet targets.

Affordable housing is dependent a great deal on non-housing policy - planning, immigration, federalism, population distribution. It is very easy for the system to go haywire. In general - more supply than demand, you can't go wrong, too much demand you can't go right.

Places like Texas where there is no planning, and housing finance is controlled are very affordable (the US supply subsidy schemes have also worked surprisingly well). The worst of all are places with tight planning controls, attracting population and with lots of funds for the wealthy to access - California, Australia, London. German housing is also extremely affordable, if not very good, because of the presence of all the corporate housing providers. This may change under the pressure of immigration.

Paul: Where does the money come from in order for the government to build a million houses for the poor, Joe Flood. What is the cost and how pays? Have you developed a money tree?

Owning a house is a desired objective for many in Asia. However, price distortion creeps in when mandatory life-long savings are used to buy houses. In Singapore, people of different income can use their life-long savings to buy houses which has kept the price of houses relatively high. Unless adequate supply is forthcoming, the price of houses will keep going up, that will leave a lot of middle-income earners not able to own them. This has driven up speculative demand and investment which has earned abnormal return. While high prices will bring forth supply, the price must be moderated to keep it affordable. In Asia, housing is big business from bank financing, property development to investments. The richest people in Asia are housing developers which indicate that relative pricing may not have been right. In the meantime, prices continue to remain unaffordable to many in Asia. The rental market is one solution and there must be govt. intervention to prevent speculative demand from driving it too high. It is important to distinguish between speculative demand and genuine demand and for the authorities to step in when it is speculative demand that is driving the market.

State support for the prices of apartments or residential complexes----

Tariq - yes that has been tried but if the price support is too low, the supply is not forthcoming. If the Government were to build them, they need to fund them from somewhere that Paul was referring to.

Paul Stock - all it takes is the political will. In fact (short of Gates and Buffett) national governments are the only ones with the money to fund real housing projects at scale. We have had Million Houses projects in - Sweden, Sri Lanka, South Africa, Brazil, most of Europe after WWII. China built 50 million houses in twenty years and then built them again. You bet if governments want to build it they can do it - but not much money for the ruling class in affordable housing.

I was amused at your 'budgeting' solution. For the last eighteen months, following an accident, I have been paying more than double my age pension in rent. Try budgeting that.

Paul: Likewise, I was amused by your answer. The government can solve all problems with 'political will'. Don't worry about money. The government has unlimited budget.

The government has the money to spend on what it wants. It can be military, it can be prisons, it can be digging holes and filling them in again - and sometimes it can be houses. As I said, it's not the money that is lacking. it is the will to spend it in this way. Those countries that wanted to just went and did it. This is not open for debate, it is a fact.

It is amazing how fast a money tree will grow once someone plants it. If you just stand there wringing your hands looking at bare earth and saying it's all too expensive, you will be left with bare earth. Those that see a vision will realise it.

Paul: Your solution doesn't address the problem. What is causing the need for housing? You should focus on the cause.

If you feed a stray cat, then tomorrow you will be feeding two stray ats. Keep feeding them and you will only attract more stray cats. The government could buy cat food and give it away for free. The problem will only get worse. You must ask, "What is causing the supply of stray cats?"

If you build free or low cost government housing, then you will only create more demand. But the real cause will not e addressed. And other important issues will not be funded.

This is just my humble opinion and you are entitled to your own opinion.

Good debate.

Supporting young people in home purchase by: guaranteeing credit and / or subsidizing interest .

In some Asian countries, first time buyer, presumably young people, are given priorities in loan applications, discounts, waiver of lawyer fees and stamp duty.

-Increase governement planning for housing.

-Control price of land, materials, and final price of house in the free market. and control bank busines of mortgages. (they go hand to hand).

-Subsidize some people.

-Favour loans affordability, and diminish interests and time of loan, also expenses.

-Diminish corruption in real estate and banks.

@Paul Stock, are you equating people looking for homes with 'stray cats'? Do I detect a Malthusian? If so, you are a nasty piece of work. Clearly you have never had to struggle to meet rent or a mortgage on overpriced housing, and you know almost nothing about housing markets and housing shortages.

The cause here in Australia is simple. House prices are too high. Far too high. Home ownership is falling. And anything the government is likely to do under the current regime will only increase the price.

Landlords cant resist the huge profits being offered to them. At the age of 69 I have been forced to move four times in five years while the sellers collected their millions.

It is also becoming overcrowded. Rental vacancy rate is about 1% compared with 8-10% in USA. I had to look at nearly 60 houses last time and put in for 21 houses before I got one - and ended up with rent twice my pension. During the move I fell downstairs, a steel cabinet landed on my chest and broke eight ribs.

You will have to read my forthcoming book to discover the secrets of housing markets, what makes them different and why and how the government must always intervene.