Key Components Of Real Estate Markets Framework Policy Principles And Guidance For The Development Of A Countryís Real Estate Market For Social And Economic Benefits

"During seminar organized at United Nations Economic Commission fo Europe (UNECE) Headquarters in Geneve by the relative Real Estate Market Advisory Group (REM) and the UNECE Secretariat, it was highlighted that the current global financial crisis is the result of inadequate regulation of real estate and financial markets. Real estate bubbles were allowed to inflate, mortgage lending was inadequately supervised, 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 in buying inflated property with innovative mortgages. Experts in the meeting agreed on the need to develop a framework for Real Estate Markets (and financial sectors related to Real Estate) that could be useful to promote stability and sustainability and to minimize the effects of the crisis. The ""KEY COMPONENTS OF REAL ESTATE MARKETS FRAMEWORK"" represents a specific attempt to address the current lack of regulations and guidance but, taken alone it cannot provide an exhaustive solution to the more complex issues related to the lack of adequate housing present in several countries in the UNECE region, which require comprehensive polices and the direct intervention of Governments. To that end the document is structured as follows: Following each of the ten principles the underlying rationale is briefly explained, always followed by a number of key indicators that should be taken into account when implementing the given principle for improvement of the real estate market. The study also advocates bringing greater harmonization to the sets of national town-planning and building laws, which ñ in some countries ñ are often regulated by very diverse and contradictory local laws. Good governance is in need of harmonized and appropriate regulations in the building and real estate sector as well. The main aims of this document are to: 1. promote the understanding of some critical issues of the real-estate sector, in order to better develop management tactics and strategies that may assist to different extents depending on the level of development of national economies ñ in the identification of solutions to the current financial market crisis world-wide; and 2. define rules and principles that may promote the development of solutions within different enforcement frameworks according to the development level of the national real-estate markets and in compliance with the respective legal systems, so that medium and long-term economic and social benefits may be drawn."