Millions of Empty Homes. Millions Priced Out.

A few days ago, representatives of the global construction industry gathered in Paris for the World Construction Association’s (CICA) Annual Conference. Contractors, engineers, lawyers, government officials, and financial institutions from different continents came together to discuss a subject with far-reaching implications: Meeting Global Infrastructure and Housing Needs: Building Capacity and Leveraging AI.

The gathering also marked a leadership transition. Among those attending were CICA’s outgoing president, Chilean Juan Armando Vicuña, and his successor, Bulgarian Lubomir Katchamakov, who was unanimously elected, becoming the first Bulgarian to lead the organisation. The federation’s Director General, Fanny Dastugue, was also present.

The presidency was passing from Chile to Bulgaria, from Latin America to Eastern Europe, through an orderly transition that reflected the institution’s strength and maturity.

I had arrived in Paris looking for an answer to a question that had troubled me for years: why are more and more people being priced out of homeownership, despite everything the world continues to build? The discussions led me to a more fundamental question: what is the purpose of construction if the people who need homes cannot afford them?

Faster, smarter, more beautiful. But for whom?

Throughout the session, discussions about artificial intelligence were enthusiastic and impressive. The technology promises faster design, more precise execution, lower construction costs, and smarter project management.

I listened, but my thoughts kept returning to three very different realities: a young person working for years without earning enough to buy an apartment; a family crowded into a single room; and more than a billion people worldwide still living in informal settlements.

The contradiction was difficult to ignore. We are developing technologies intended to make life better and more efficient, yet we remain unable to address one of humanity’s most basic needs: a decent home. If we can build faster and more beautifully, why do millions of people still live in informal settlements or on the fringes of cities?

I pictured a young engineer sitting in that very conference hall, using artificial intelligence to design an entire tower in a matter of days, only to return that evening to his parents’ home because he cannot afford even a modest apartment.

The image may be imagined, but the reality it captures belongs to an entire generation: people who help build cities yet cannot afford to live in them. Technology has advanced at extraordinary speed, while the ability of many people to secure affordable housing has deteriorated.

We had discussed how to make buildings better, but paid far less attention to making life inside them more affordable. We examined how technology could reduce construction costs, but not why those savings do not necessarily translate into lower selling prices. In markets such as Egypt, this distinction is particularly important. Property prices are not determined solely by construction costs; speculative demand and expectations of future price appreciation can exert a powerful influence on market prices.

This is the uncomfortable limit of technological progress: artificial intelligence does not inherently favour the poor. Its benefits depend on who controls the technology, how it is deployed and, above all, whose interests it serves.

A half-century-old federation: where is the human being in its agenda?

Founded in Tokyo in 1974 and headquartered in Paris, CICA represents an industry that employs around 180 million people and generates more than $7 trillion in annual business. For half a century, its agenda has largely reflected the priorities of those who build: fairer contractual arrangements, relations with multilateral development banks, long-term financing for infrastructure projects, and reforms to procurement practices that award contracts solely based on the lowest bid.

More recently, affordable housing has joined its agenda, alongside sustainability, innovation and resilient cities. This is welcome progress. Yet discussions about housing still tend to focus more on the perspective of those who produce it than on the needs of those who occupy it. The questions concern how many units can be built, at what cost, and with what financing. A more fundamental question remains: can the people who need those homes actually afford to buy them?

It is legitimate to ask why a federation representing those who build the world does not give greater attention to the people who will live in it.

Perhaps the answer lies in how success is traditionally measured. For a contractor, success is a completed project, delivered on time, and within budget. For the family that needs a home, success means being able to afford one in the first place. These are not necessarily the same thing. Until the construction industry recognises that distinction, its achievements will remain incomplete.

With the presidency passing to new leadership and the next General Assembly scheduled to take place in Sofia in 2027, CICA has an opportunity to redefine its priorities. Its next chapter should place people, not merely projects, at the centre of the construction industry.

From our parents’ generation to our children’s

For earlier generations, housing was often more attainable. Some began married life in rent-controlled apartments, where regulated rents offered a degree of long-term security. Others were able to save for a few years before buying a home. For many people today, that prospect has become considerably more distant.

In Egypt, the house-price-to-income ratio rose from 6.6 times in 2016 to around 15 times in 2024, more than doubling in eight years. The acceleration was particularly striking in 2023, when property prices increased by around 42% in a single year.

The same affordability pressures are evident in some of the world’s wealthiest economies.

In the United States, the median age of first-time homebuyers was around 29 in the early 1980s. Today, it has reached 40, the highest level on record. First-time buyers accounted for around half of home purchases in 2010; their share has since fallen to just 22%.

Across major property markets, house prices have become increasingly detached from household incomes. A price-to-income ratio of three is commonly used as a broad affordability benchmark, yet several major markets exceed it by a wide margin. In Hong Kong, the price of a typical home is equivalent to around 14 years of household income, while the figure in Vancouver is approximately 11 years.

Yet the picture is not uniformly bleak. Singapore offers a striking counterexample, with homeownership exceeding 89%. Its experience reflects decades of public investment in housing, supported by policies and financing arrangements designed to broaden access to homeownership.

The crisis, therefore, is not inevitable. It is shaped by policy choices, and policy choices can be changed.

Egypt: 15 years of wages for a ‘social housing’ flat

Egypt’s private-sector minimum wage stands at EGP7,000 a month, or EGP84,000 a year. Even an apartment under the social housing programme, without an elevator, can cost as much as EGP1.25 million. At that price, a minimum-wage earner would need nearly 15 years of gross wages to pay for the apartment, assuming every pound earned went towards the purchase and nothing was spent on food, healthcare, or education.

The private market is even more prohibitive. A 100-square-metre apartment in a middle-income neighbourhood in the Fifth Settlement, in New Cairo, can cost the equivalent of 42 to 60 years of minimum-wage earnings. This is no longer simply a problem of rising property prices. It reflects the growing exclusion of younger and lower-income households from the housing market.

The contrast with wealthier economies is not merely a matter of income levels. In some markets, prospective homeowners can access mortgage financing spread over as many as 30 years, while more comprehensive housing-market data provide buyers and policymakers with a clearer picture of prices and affordability.

In Egypt, access to mortgage finance remains limited for many prospective buyers, leaving household savings and financial support from relatives, including those working abroad, as important sources of funding. Compounding the problem, the country still lacks an official, comprehensive house-price index that would allow buyers, policymakers, and investors to track market movements consistently.

The consequences go far beyond lost years of savings. They include delayed marriages, children raised in rented homes without the security of ownership, and people approaching retirement while still burdened by unpaid instalments. Housing delays can postpone a series of personal and family milestones. When the home is delayed, much of life is delayed with it.

Cities without residents, residents without homes

The most troubling paradox is that Egypt does not simply lack housing. Its latest population census recorded around 12.5 million vacant or closed housing units, nearly 29% of the country’s total housing stock. More than 4.6 million were reported to be fully finished and ready for occupation, yet remained empty. In the new cities on which billions of pounds have been spent over the past four decades, meanwhile, only about 1.7% of the population lives.

Millions of doors remain shut, while millions of young people search for just one door they can call their own.

Part of the explanation lies in what a home has come to represent. For many owners, property is more than a place to live: it is a store of value and a hedge against inflation. Some units are bought not necessarily for occupation, but to preserve wealth, leaving them vacant while their owners wait for prices to rise.

That distinction points to the real problem. Egypt’s housing challenge is not simply about how many homes are built, or how much cement and concrete the construction industry can produce. It is about where homes are built, what they cost, and who can afford them. The question is whether the country is building in the right places, at prices people can afford, and for the households that need homes.

Who will own the homes in the end?

If young people can no longer afford to buy homes, who is buying them instead? Increasingly, the answer includes people and investors who already own property.

In the United States, investors accounted for around 18% of home purchases between 2020 and 2023; by 2025, their share had risen to almost a third. Roughly 18% of the country’s housing stock is now held by investors, while the number of renter households has reached a record high. The growing role of inheritance in financing down payments, alongside the rising age of cash buyers, points to a market in which existing wealth increasingly shapes access to homeownership.

In Egypt, a similar dynamic is visible, even if comparable data are less readily available. Households with sufficient savings or existing assets may buy a second or even a third property to protect their wealth against inflation. Those without property or substantial savings, meanwhile, face an increasingly difficult path into the market.

If this trend continues, a person’s prospects of owning a home will increasingly depend not only on their work and income, but also on what they inherit.

We risk becoming two separate societies: one of property owners who pass homes down through generations, and another of tenants who pass the burden of rent from one generation to the next.

Where will people go?

When the formal housing market becomes unaffordable, households turn to alternatives. In Egypt, the informal sector accounted for around 78% of newly built housing units in 2021, largely because formal alternatives had become unaffordable for many households. Others move to distant urban fringes, where lower housing costs come at the expense of longer commutes and reduced access to services. Many remain in their parents’ homes, postponing marriage and the independence that comes with it.

Renting is not necessarily an easy alternative. Tenants account for just 14% of Egyptian households, while rising rents add to the pressure on households unable to buy.

The question is what happens over the next decade. In a hypothetical scenario in which property prices rise by 15% annually while wages increase by 10%, the affordability gap would widen. An apartment currently equivalent to 15 years of minimum-wage earnings would cost roughly 23 years of such earnings after a decade, assuming those growth rates persisted.

Even if wages and property prices rise at the same pace, affordability would not improve; the gap would simply remain where it is.

To return to the 2016 affordability ratio over ten years, household incomes would need to outpace property prices by approximately 8.6% a year on a compounded relative basis.

An index linking house prices to buyers’ incomes

An industry that wants to make technology serve people must first be able to measure whether housing is becoming more or less affordable. An industry worth more than $7 trillion, with access to extensive data and technical expertise, should be capable of developing an index that links housing prices to local incomes across cities and neighbourhoods.

My proposal is straightforward, although its implementation would require discipline. The index would measure the relationship between the price of an adequate home and median household income in each locality, expressed as the number of years of household income equivalent to the property’s price. It would be updated every three months and made publicly available.

If prices in an area exceeded an agreed threshold — say, five times annual household income — the government would be expected to consider a response. Measures could include releasing additional land in suitable locations, speeding up planning and licensing procedures, directing concessional finance towards homes priced in line with local incomes, and imposing charges on persistently vacant properties to encourage their return to the rental market.

The appropriate threshold would need to reflect local market conditions, and the index would have to distinguish between advertised and transaction prices, as well as account for differences in housing quality and location. It should be a tool for informing policy, not a substitute for it.

This is also where artificial intelligence could make a more meaningful contribution. Rather than simply helping developers design and construct buildings faster, it could bring together data on property prices, household incomes and building costs, analyse market movements, and flag signs of speculative excess before they become more pronounced.

Are we building homes or building markets?

I left Paris convinced that the central question is not how many homes we can build, or how quickly, but whom we are building them for — and who will ultimately own them. A home that no one can afford is not a solution to the housing crisis. It is part of the crisis itself.

Technology has already shown that it can help us build faster than we once thought possible. The greater challenge is to use it to make housing more accessible to the people who need it.

The construction professionals and experts who gathered in Paris have the knowledge and tools to help make that happen. What is needed is a willingness to measure the industry’s success not only by the projects it delivers, but by whether people can afford to live in them. A city’s achievement should not be measured by the height of its towers, but by how many families can afford a place behind whose door they can close the world out at night.

I urge CICA to put the proposed housing-affordability index on the agenda of its next meeting in Sofia and to make its next chapter about the people who inhabit buildings, not merely the buildings themselves.