Financialization

Financialization of housing’ refers to the recent structural changes in housing and financial markets where housing is used as a financial instrument to park, grow, leverage and/or hide capital, often providing security for financial instruments that are traded on global markets. Financialization of housing also includes en masse purchasing of affordable housing by large corporations which they deem “undervalued”. These acquisitions are then repositioned as higher-end rental accommodations, purchased and managed with a healthy return on profit as the motive.

Exponential growth of the financialization of housing, particularly since the Global Financial Crisis has turned real estate into arguably the largest business in the world, valued at US$280.6 trillion, with residential real estate making up by far the largest portion of this, at US$220.6 trillion as of the end of 2017.

The financialization of housing is a fairly new phenomenon. While housing has long served as a commodity, it is only in recent years that the intersection of neo-liberal policies and funds with large purchasing power has created a crisis in the housing market that threatens human rights. The Shift has created several resources on financialization, exploring what falls under the umbrella of financialization and investigating its impact around the world.

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Other Resources on Financialization

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