The origins of the present study trace back to the high-level roundtable discussion organized at United Nations Headquarters in New York on 16 December 2008, on "The Real Estate and the Financial Crisis: Causes, Effects and Impacts on Development". Speakers at the round table underlined that the current global financial crisis was the result of inadequate regulation of real estate and financial markets. Real estate bubbles were allowed to inflate, mortgage lending was inadequately supervised, the 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 when buying inflated property.
As a consequence, recessionary effects spread to the real economy worldwide. At the meeting, experts also agreed on the need to develop a framework for promoting sound real estate markets as well as improved financing for the sector. Both could help promote stability and sustainability of the region's economies and minimize the effects of the crisis. Subsequently, REM prepared the present draft document with 10 principles as the key components of a Policy Framework. These were discussed at a forum in Rome on 3 and 4 June 2009, organized by WPLA and REM and hosted by Tecnoborsa. The present study incorporates the comments received during the Rome forum, the sixth session of the Working Party (Geneva, 18-19 June 2009) and the public consultations that followed these two events. Its findings should be taken into consideration in the context of a wider spectrum of other tools developed by CHLM and WPLA, such as the guidelines for housing finance, spatial planning, social housing and condominium management.
The document is structured as follows: each of the 10 principles and its underlying rationale is briefly explained, followed by a number of key indicators that should be considered by relevant authorities when implementing related policies. The study also advocates improved harmonization of national urban planning and building laws which, in some countries, are often regulated by diverse and contradictory legislation.