Towards Financial Risk and Housing Policy Trends

Institutions providing access to housing in all tenures have become further entrenched and exposed to financial risk. Literature on housing policy trends and financial risk cover drivers such as liberalisation, monetary approaches, innovation, political commitment, and asset management. A conceptual model is put forward for framing housing policy trends that engage with financial risk. This allows documentary analysis of national housing policy trends to be carried out in a taxonomy of financial risk sources, financial risk types, and financial risk measurements – focussing on UK, US, and China national cases. Qualitative primary findings are integrated from multiple key stakeholder interviewees in residential real estate, particularly those engaged with financial risks of housing policy in New Zealand. Findings show that contemporary housing policy trends have incentivised institutions to take on greater financial risk, whilst simultaneously institutions have encouraged financial risk exposure. Discussion centres on systematic and unsystematic risk ‘in’ the finance of housing policy trends, that often work counter-intuitively to the financial risk ‘of’ housing policy trends. Especially as there are financial risks of a housing policy trend that focus on a single tenure. Plus, there is tendency to focus on the downside financial risk of known probabilities, rather than seek out unknown upside financial risks that may have escaped detection.