Research article

Global Living: Outlook

People of all ages are embracing more flexible forms of living, creating opportunity for providers of ‘alternative’ residential rental assets

Demographic trends are working in investors’ favour. By 2050, the global population of student age is estimated to reach 1.3 billion, those aged 25-39 (a key demographic target for multifamily housing) will reach 2 billion and the over 65 population will reach 1.6 billion, according to UN forecasts. This represents growth of 11%, 13% and 113% respectively, presenting a huge opportunity, particularly for the senior sector where growth is expected to greatly outpace that of younger generations.

Identifying the future demographic hotspots which will drive demand for each form of accommodation will be key. Many markets are undersupplied. Australia’s student population has seen significant growth in recent years, its student housing market is growing and prospects are positive. Canada, with similar characteristics, is positioned for growth in its student housing sector too.

Meanwhile in Europe, Spain and Portugal have the potential to double their purpose-built student housing stock, while Italy could quadruple its stock before becoming fully supplied.

China’s large and ageing population also presents opportunity for providers of senior housing. The UAE, which has a very high propensity to rent, is a migration hotspot with a large share of high-income households, and offers potential for multifamily.

For each form of accommodation, tailoring the assets’ features to meet the residents’ requirements and proactive management will be essential to achieve operational efficiencies. Investors’ search for secure income streams will continue to underpin interest across ‘alternative’ residential assets. Pioneer investor-developers will be integral to delivering new supply, securing tomorrow’s investment stock.

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