Population Shifts Reshape Housing Demand

WASHINGTON, DC-New opportunities to provide housing–including senior and medical care facilities–will emerge across the globe over the next several years, according to a report released this morning by the Urban Land Institute. These opportunities–particularly in Europe and Japan, both of which are characterized by aging demographics–are the result of several overarching global developments, including immigration and migration, urbanization in emerging markets, and tourism. The report is called Global Demographics 2008: Shaping Real Estate’s Future.

All of these trends are leading, in general, to overwhelming demand for housing in most countries, Leanne Lachman, president of Lachman Associates and Executive-in-Residence of Columbia Business School, told the audience at the press conference at which the report was released. Even those countries and regions where population is contracting–namely Europe and Japan–there are significant opportunities for housing development, Lachman, who authored the report, said.

“Europe is entering a demographic slump. It will still need development but the new construction will replace existing structures—-there will not be new net demand.” Population losses will be particularly acute in Russia and the former Soviet Union states. Investors should proceed cautiously and evaluate potential demand in Europe, she adds. With that said, there will be a strong need for senior and medical care housing.

Global aging, in fact, will be driving demand for senior and medical care facilities in almost every market, she said. How these trends will actually translate into development, though, will depend entirely on the market in question. In Europe, for instance, seniors tend to live within the city limits. In the US and Canada, the senior population is so diverse with such different needs, there will be any number of lifestyle choices seniors will expect to have available to them–assuming the current baby boom generation accepts that it is aging to the point where they need specialized housing, Lachman said.

Other trends shaping global housing demands include migration and urbanization. Countries such as the US and Canada will always have a need for housing to accommodate immigrants. Even emerging countries are finding demand for housing fueled by migration, or rather urbanization, with more people seeking opportunities in the cities. Global tourism is also a growing development force, most recently seen in China as it readies itself for worldwide visitors attending the Olympics.