A new report from the Urban Land Institute puts the world’s aging population as the most dramatic demographic trend. By 2030, one-eighth of the world’s population will be over 65 years old.
In the United States, the aging of baby boomers and the “coming of age” of echo boomers will lead to a dramatic increase in single-person households, driving demand for more multifamily housing in both retirement and workforce categories.
“Working with demographics, rather than against them, reduces development risk and is likely to enhance returns,” said M. Leanne Lachman, co-author of the report and executive in residence for the Milstein Center for Real Estate. “Therefore, the report’s emphasis on real estate demand has broad applicability for both investors and developers.”
Lachman, who is president of Lachman Associates, LLC, co-authored the report “Global Demographics 2008: Shaping Real Estate’s Future” with Deborah L. Brett.
The report also points out that by 2015, seven of the world’s ten largest urban agglomerations will be on the Asian continent and will be home to more than 15 million people each: Tokyo, Mumbai, Delhi, Shanghai, Kolkata, Dhaka and Jakarta. By 2030, Indonesia’s urbanization will approach that of Japan.
The report also notes that Europe’s share of the world’s population will drop from 11 percent to 8 percent by 2030, as the population shrinks by 40 million. One of a few exceptions is the United Kingdom, which will see an increase in population of nine percent, due to immigration. Low fertility rates throughout the continent will add to labor shortages and by 2030, if trends continue, Europe will have 59 dependents for every 41 working-age residents, the report notes.
In contrast, Africa and the Middle East currently have more than 17 percent of the world’s population, but this will expand to 22 percent by 2030.
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