Importance of Demographics for Real Estate Investors

Real estate has often been termed as a people business, which includes workers, customers and dwellers. This is why understanding major demographic shifts are important for property investors

However, an in-depth understanding of markets is becoming important. For e.g., Europe, which has an aging population, should see a decreased in demand for housing. But, due to urbanisation and people shifting to cities, demand for residential properties in cities in Europe remains buoyant.

The Asia-Pacific region, which was once dominated by working-age people, now comprised of a population that is mostly ageing. This has lead to an increase in real estate investments in residential assets, including healthcare and retirement homes.

In the US, the millennial generation is changing the estate markets, by investing in offices and housing. There are a number of life sciences and biotechnology companies, which are helping people, live longer. These companies are snapping up more and more specialist commercial space, which has created a number of opportunities for investors.

The biggest opportunity for real estate investors is in Africa; where the population is expected grow by 2.2 billion between now and 2050. Nearly half of that growth is expected in Africa. The country has become biggest real estate opportunity.

There has also been a change in the age-group of people investing in property. Earlier people used to get married and have kids in their 20’s. However, now people have started doing that in their 30’s. The size of families has also become smaller, with the emergence of nuclear families. This has lead to an increase in demand for smaller apartments instead of big villas or properties.

Real estate investors are looking at housing to capitalise on demographic and urbanisation trends have started investing in residential markets. There has been an emerging interest in impact investing that could be instrumental in bringing more institutional capital into affordable and social housing markets. There is an excellent opportunity for positive social impact through real estate investment. The increase in demand for residential and commercial property is huge, and remains largely unmet.