The global financial crisis of 2008 was the result of inadequate regulation of financial and real estate markets. Real estate bubbles were allowed to inflate, mortgage lending was inadequately supervised, the financial markets were allowed to develop complex financial instruments that few understood, credit risk was inadequately modelled, and credit rating agencies failed to carry out their fundamental role. Investors also failed to properly understand the instruments they were buying, and consumers failed to evaluate the risks they were undertaking when buying property. As a consequence, recessionary effects spread to the real economy worldwide, negatively affecting many aspects of people’s lives, particularly housing affordability and accessibility of urban services.
In order to prevent similar episodes in the future, the UNECE Real Estate Market Advisory Group (REM), prepared the first edition of the UNECE Policy Framework for Sustainable Real Estate Markets back in 2010. It presented a principle-based framework for the development of a real estate sector to promote access to affordable and decent housing. In 2016, the UNECE Committee on Urban Development, Housing and Land Management invited the REM to update the Policy Framework in order to integrate the concepts of key UN documents, such as the 2030 Agenda for Sustainable Development, the Geneva UN Charter on Sustainable Housing, the New Urban Agenda, the Paris Agreement, and the Basel III Agreement.
Supporting a holistic, multi-sectoral approach, the updated Policy Framework, launched today during the UNECE Sustainable Cities Week, presents a set of twelve Principles to promote the sustainability of real estate markets and the achievement of the Sustainable Development Goals (SDGs):
- Promoting the real estate sector and the urban economy as one of the main contributors to inclusive and sustainable economic growth.
- Creating a supporting regulatory system by integrating regional and international norms and standards into the national legislation.
- Enhancing governance to create a healthy, transparent, professional and resilient real estate sector.
- Greening the real estate sector to support the quality of life of people and healthy environment.
- Integrating real estate markets into smart and sustainable urban development activities.
- Enhancing the efficiency of land registers and cadastres’ operations for transparent land and property management.
- Enhancing people’s quality of life by investing in regeneration and renewal of public and private housing including landscape, historical and cultural heritage.
- Financing for lending and investment rules.
- Strengthening the capacity of financial institutions to ensure the access to financial services for real estate products.
- Supporting property valuation based on transparent asset appraisal criteria in line with international standards.
- Promoting social housing and affordable housing for social cohesion, inequality reduction and inclusivity.
- Supporting training and capacity building activities to promote the efficiency of services in the real estate sector.
This updated Policy Framework takes into account new macro-trends such as: growing expansion of cities, migration and increasingly mobile populations, technology and innovation, the growth of emerging markets and asset competition, the change in housing demand oriented towards green buildings and new designs, energy consumption and climate change issues.
The Framework is available online at: https://www.unece.org/housing/advisory-group.html