In the last few years the housing market has changed and expanded rapidly. It started with houses being traded like other non-essential commodities therefore automatically excluding the intangible value of the house to a family. Houses have become a form of investing for many with hedge cities where real estate investment has been increasing exponentially. We may pause here and ask ourselves does more investment not mean more growth well it does but this growth leads to a rise in price of houses in these hedge cities; In some the prices are so high that people tend to leave those hedge cities even if it means losing their livelihood. This may also lead to people using informal credit sources which results in higher interest and larger chances of foreclosures. Now all this leads us to believe in the fact that finance has only caused turmoil in the housing sector and the only one profiting from the financialization of housing are banks and other financial institutions but this may not be entirely true. The fact remains that loans for production are always not evil. If one can arrange debt for his house in such a manner that his monthly mortgage payment is lesser than or close to the rent in his locality and this debt be insured this debt will always be beneficial to the banks and the borrowers. Therefore, completely eliminating housing finance options would result in turmoil for the majority of cases which happen to occur like the preceding example. However, we fail to identify that this singled out case although is what happens a majority of time has its own shortcomings. Remember when the housing projects in cheap/affordable localities were often canceled or most of the time never even exist. This is because it costs the same to build a house no matter where you do it in the city so the real estate developers will lobby governments to persuade them into approving and sanctioning housing projects only in areas where housing is costly knowing you will still likely have to buy that house via a mortgage plan. This furthers economic inequality because the set of people who can’t afford mortgages wouldn’t be able to buy a house and would therefore be displaced from their own city this mostly happens to the vulnerable sections of the society like the poor and disabled. This creates a vicious cycle where in the poor cant afford housing the middle class takes on a large amount of unnecessary debt which they are likely to default on.  It is noteworthy here that the real estate developer never risks anything or has the chance of losing his/her money and the bank too takes on a marginal amount of risk (as they only initiate these loans) and in most cases does not lose any money therefore this is a classic example of the rich becoming richer and the poor becoming poorer. Further these transactions are regulated only by the laws of contracts and housing regulations this keeps these kinds of transactions in which people are sustainable to losing a high amount of money for some their life savings beyond the control of the government for the most part.

Another major disadvantage is that in all other markets price tends to be a function of speculation but however when in the housing market is speculated upon we often forget that a home is much more than a tangible asset to most people it is sometimes a memory; we all can relate to our childhood home imagine it being sold because someone in a remote office thought that it’s price would increase/decrease. To some it’s the only place they can to stay almost all of us can’t even dare to imagine how our life would be in the event of our house being lost.

All this may sound fine and the government sitting down and offering a fair price and fair debt agreement on each house might sound even better but let’s face it that’s clearly not possible. Our modern-day governments face a problem we the people who want to live in a utopian society want equal outcomes for every individual that lives but that is illogical and just not feasible instead our governments must aim to give equal opportunities to all of us. All of us must get the opportunity to hear and see the rationale behind each housing policy decision. All of us must get an opportunity to a fair and accountable housing debt mechanism. Further governments must arrange for legal and financial counselling to all those who are taking on more debt below a threshold which is calculated for each individual. Added to all this all debts must be insured.

Further evictions that result in homelessness must not take place until the government arranges for other rehabilitation options for these people.

In summary debt can be both a boon and bane depending on how we use. Currently bad regulation or negative regulations and lack of accountability and justice is what is stopping the housing market from being good for all of us but with subtle and simple changes by governments all this can be stopped.