Financialisation of housing markets

13th Nov 2017

Investification: Financialisation of housing markets and persistence of suburban socio-economic disadvantage

A new paper by Kath Hulse and Margaret Reynolds is now available online

Abstract

The relationship between urban housing markets and spatial patterns of socio-economic disadvantage has fascinated urban scholars for decades. The gentrification and subsequently suburbanisation of disadvantage literatures have explained how housing markets are both a driver, and outcome, of changes in the socio-economic composition of urban areas, albeit focusing mainly on owner occupation and social housing. In the 2000s, research into the financialisation of housing finds increased household-level investment in private rented housing as an important contemporary driver of housing markets. Based on a detailed study of Melbourne (Australia) in 2001–2011, the article identifies established suburbs of persistent population socio-economic disadvantage, which were characterised by sale prices and rents increasing above citywide rates in 2001–2011 and a disproportionate increase in private rented housing. The article offers a new concept of investification to explain a process whereby disproportionately high levels of household investor purchases in disadvantaged suburbs contribute to higher prices/rents and to the persistence of socio-economic disadvantage, as properties are rented on the private market to low socio-economic households, indicating replacement rather than displacement. Connecting with research on the financialisation of housing through the concept of ‘investification’ can provide a more nuanced understanding of the relationship between contemporary housing market change and the geography of suburban disadvantage in the Australian context. The concept is likely to be of broader significance given the recent increase in Buy-to-Let activity in countries such as the UK, opening up new research questions on the interrelationship between households as investors and consumers and the geography of urban disadvantage.

You can access and read the full article here