ULI Report Highlights Major Worldwide Demographic Trends
- Jun 12, 2008
The world is getting smaller, perhaps warmer, certainly more crowded and probably wealthier, but most of all, it’s getting older. For example, by 2030 one in eight of the world’s people will be over 65. That’s one of the key conclusions in “Global Demographics 2008: Shaping Real Estate’s Future,” a brand-new report from the Urban Land Institute, with partial sponsorship by Deloitte L.L.C. “Global aging is the most significant global demographic trend,” co-author M. Leanne Lachman said in a press briefing this morning. Lachman is president of Lachman Associates L.L.C. In introducing Lachman, ULI executive vice president Rachelle Levitt commented that “We rely on demographics as a key barometer of future real estate demand, especially residential real estate.” Other important demographic trends noted in the report are migration, urbanization and tourism. Some of the report’s points are startling. It’s one thing to note that Africa is home to the world’s youngest population, and that Japan is the world’s oldest country. It’s another to point out that the median age in Japan, 43, is triple the average age in Uganda. While Japan is increasingly short of workers, Uganda, in the wake of AIDS, is short of adults to raise its millions of children. The developed world will see its elderly population increase by 51 perccent by 2030, Lachman said, but another side of an aging world is that “Some developing nations will be old before they’re rich.” And after several decades of a one child per family policy, she noted, “China’s future age profile will be dramatically older.” With ongoing low fertility rates, Europe will see its share of the world’s population drop from 11 percent now to just 8 percent by 2030. “That’s a massive shift in a short amount of time,” Lachman said. “Europe’s demographic trends are really troubling.” Twelve of the 15 nations with the lowest fertility rates are in Europe, primarily Eastern Europe, and all have fertility rates lower than Japan’s. Russia is losing population at a rate of 1 million annually. Europe is entering “a long demographic slump,” Lachman said, and “all of Europe needs more retirement housing,” especially for those over 80. But even that can provide opportunity, she noted, because “U.S. companies have exportable experience in providing it.” In 2007, Lachman said, Western Union sent $318 billion to developing countries, mostly money sent home by immigrants. Not only is that figure double what it was in 2000, but it’s triple all foreign aid in that year. Although some nations will increasingly struggle with the economic consequences of aging populations, the six English-speaking nations that accept significant numbers of immigrants (the United States, Canada, the United Kingdom, Ireland, Australia and New Zealand) will remain “dynamic, demand-driven real estate markets for the foreseeable future,” provided that such immigration continues, Lachman said. Under the heading of urbanization, Lachman cited another attention-getting number: Urban centers in Africa and Asia are gaining population at the rate of 1 million each week. The report notes that opportunities for experienced builders of First World affordable housing are emerging in developing nations. As to tourism, the report states that although formerly exotic destinations like Vietnam, Egypt, the Maldives, Mauritius and northeastern Brazil are getting interest from investors, Europe still has seven of the top 10 tourist destinations, which account for 47 percent of international visits and half of expenditures. Europe is also capturing the majority of interregional travel, the fastest-growing category. Overall, one of every 12 jobs worldwide is associated in some way with travel and tourism.