Housing Financialization in the Global South: In Search of a Comparative Framework

ABSTRACT

The financialization of housing in the Global South (GS) and peripheries of the Global North (GN) develops in different ways than in the GN because the mechanisms underlying and pushing financialization are fundamentally different. We argue that subordinated financialization in the GS is the contemporary form of uneven and combined development, shaped by the financialization of the GN. The recycling of GN excess liquidity in countries lower in the global money hierarchy has contributed to the growth of mortgage lending in the GS and peripheries of GN. With the macrocomparative perspective in our article we provide a framework to rethink the relations between GN and GS in shaping distinct patterns of uneven and combined financialization, but also to rethink the varieties of capitalism and residential capitalism approaches. In the GS we can distinguish between at least two additional types: state-led market economies and less-financialized market economies.

KEYWORDS:

• subordinate financialization
• Global South
• uneven and combined development
• housing markets
• mortgage lending
• financial development

Acknowledgment

The authors would like to thank the reviewers and editors of this Journal as well as the members of the Real Estate/Financial Complex research group who have provided constructive feedback on earlier drafts of our paper.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

1. Not all accepted abstracts materialized as articles, which explains why we have included more countries than are covered in the other articles in this special issue.

2. This type shares some characteristics with the hierarchical market economies, a type developed by Schneider (2013) for Latin America, but with less emphasis on the role of the state.

3. A repo involves the sale of a security with an agreement to repurchase the same security back at a higher price at a later date. Repo transactions have become the main funding channel for banks in developed economies in the age of financialized capitalism.

Additional information

Notes on contributors

Rodrigo Fernandez

Rodrigo Fernandez is a senior researcher at the Centre for Research on Multinational Corporations (SOMO). Previously he was a postdoc (2011–2013) at the University of Amsterdam and at KU Leuven/University of Leuven (2013–2019). Rodrigo has published on offshore financial centers, shadow banking, real estate and financialization. In his current research, he focuses on the financialization of nonfinancial corporations.

Manuel B. Aalbers

Manuel B. Aalbers is professor of Human Geography at KU Leuven/University of Leuven (Belgium) where he leads a research group on the intersection of real estate, finance and states. He has also published on financialization, redlining, social exclusion, neoliberalism, mortgage markets, the privatization of social housing, neighborhood decline and gentrification. He is the author of Place, Exclusion, and Mortgage Markets (Wiley-Blackwell, 2011) and The Financialization of Housing: A Political Economy Approach (Routledge, 2016), editor of Subprime Cities: The Political Economy of Mortgage Markets (Wiley-Blackwell, 2012) and associate editor of Encyclopedia of Urban Studies (Sage, 2010).