Explore Cushman & Wakefield's comprehensive analysis of Europe’s living sector through 2040. Our latest report delves into the demographic and societal trends driving unprecedented growth, the challenges of meeting housing needs, and strategic insights for investors and developers.
Unpacking Europe's Living Revolution
Tom McCabe • 20/06/2024
KEY TAKEAWAYS:
Demographics/Societal Change- Population growth will be a major driver of living sector demand in Ireland – Ireland’s population is forecast to grow by almost 10% by 2040 (the strongest growth rate in Europe) and this demographic change will be a powerful driver of demand for housing of all types.
- Irish housing affordability (as measured by the change in the House Price/Income ratio) has deteriorated in the past decade, a trend we expect to support private rented and cost rental demand amongst middle income households.
- As a nation we are getting older – by 2040 the numbers of people in Ireland over 65 years of age will increase by 50%, pointing to a big increase in real estate demand for purpose built healthcare and senior living accommodation.
Ireland – A growing market for institutional investment
- Over the past decade Ireland has been one of the fastest growing markets in institutional investment terms. With our growing demand for housing, continued international investment will be a vital component of the solution to our longer-term housing needs.
Rental market regulation – Ireland has re-regulated rapidly
- However, in a relatively short period of time Ireland has become one of the most heavily regulated rental markets in Europe which in our view could hold back institutional investment. This was echoed in the findings of our EMEA Living survey earlier this year where 53% of institutional investors said that rent caps represented a barrier to further investment in Ireland. Greater long-term certainty and consistency in our view is a must to unlock greater levels of international investment into Ireland’s living markets.
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Latest Trends in Europe’s Living Sector
- Demographic Shifts: Population growth and ageing populations are reshaping housing needs.
- Urbanization: Major cities are expected to grow, increasing demand for urban housing.
- Housing Affordability: Affordability issues continue to drive rental and affordable housing demand.
- Senior Living: The growing elderly population necessitates more senior living facilities.
- Student Accommodation: Rising international student numbers fuel demand for purpose-built student housing.
Frequently Asked Questions
The growth is primarily driven by demographic shifts, including an increase in private rented, student accommodation, senior living, and affordable housing demand. Urbanisation and changes in housing affordability also play significant roles.
Countries with growing populations and potential for further urbanisation, such as the UK, Ireland, Benelux countries, Spain, and Sweden, present the most attractive investment opportunities.
Key challenges include high construction costs, regulatory hurdles, and housing affordability issues. Government support and streamlined planning processes are essential to overcoming these challenges.
Urbanisation significantly impacts housing demand, with major European cities expected to grow substantially, driving the need for diverse housing solutions.