Urban pressures and policy gaps deepen Asia-Pacific housing crisis

Poor land policies and weak finance systems worsen the housing affordability crisis.

Asia-Pacific’s housing affordability crisis is worsening despite slower population growth, as shifting household patterns, speculative investment, and systemic barriers continue to push homeownership further out of reach.

According to Elliott Hau, Head of Financing Valuation at Colliers Hong Kong, housing prices across the region have surged dramatically over the past years.

Hau identified three key factors driving the surge. “The first one is the government policy which slows down the land sale for residential use, which fills up the competition and price search,” he said. “Developers may sometimes hold the land for speculation,” he added, noting that prolonged low interest rates had “driven up speculative investment for foreign demand.”

Liz Satow, Area Vice President for Asia and the Pacific at Habitat for Humanity International, said that rapid urbanisation and structural inequalities have compounded the affordability problem. “Urbanisation and the speed of it is outpacing the capacity of cities to provide safe, affordable housing. This leaves tens of millions of people in overcrowded, insecure and substandard conditions,” she said.

Satow added that climate change has added “another layer of complexity,” citing rising construction costs and the increasing frequency of disasters. “Asia is five times more likely to experience a disaster than other parts of the world, and this impacts housing,” she said.

Beyond environmental and economic factors, Satow highlighted systemic barriers that continue to exclude vulnerable populations. “Rising costs of land and construction materials place home ownership further out of reach for low income families, but at the same time, discriminatory practices, particularly those affecting women, marginalised communities and vulnerable groups, limit access to land ownership and inheritance rights,” she explained.

Financing remains a major obstacle to affordable housing. Both experts agree that construction activity is not keeping pace with rising needs. Hau attributed the slowdown to “high construction cost, rising material prices and economic intensity, including a cautious investment climate due to high interest rate,” which he said has led developers to “delay or scale back projects” to avoid market oversupply.

“Finance is essential, but it’s not enough on its own to truly close the housing gap,” Satow emphasised. “We need clear building standards and regulations that are enforced to ensure safety and resilience… and smart incentives that encourage developers to build affordable and climate resilient homes.”