Worldwide construction of new housing units is forecast to increase 3.0 percent annually to 62.6 million units in 2019. While global population growth is expected to decelerate, declines in average household size will still allow the number of households in the world to increase 1.6 percent annually, boosting demand for new housing. In addition, increased rural-to-urban migration, especially in developing countries, will spur construction of new housing units in urban areas. These and other trends are presented in World Housing, a new study from The Freedonia Group Inc., a Cleveland-based market research firm.
North America and Western Europe are expected to experience the most rapid growth in new housing units through 2019. In both cases, gains will be off a depressed 2014 base, with many countries recovering from the collapse of housing bubbles. Several of the countries that experienced the most severe downturns, including the United States, Ireland, Italy, Portugal, and Spain, will experience double-digit annual increases in new housing units, although in most cases 2019 levels will remain substantially below those in 2004.
On a global basis, multifamily units are forecast to experience faster gains in new construction than are single-family units, the result of increasing urbanization in developing countries. Rural-to-urban migration will be particularly strong in the two most populous regions—the Asia/Pacific and Africa/Mideast—and those new urban residents will boost demand for multifamily housing. Construction of new multifamily units worldwide is forecast to advance 3.7 percent per annum through 2019; in that year, more than 80 percent of new housing units will be built in the Asia/Pacific and Africa/Mideast regions.
Growth in the housing stock is expected to outpace household formation through the forecast period, reaching over 2.2 billion units in 2019. Rising income levels over the forecast period will support the increases in housing stock per household through two means. First, some lower-income households will be able to move out of shared living quarters into their own housing units. Second, some affluent households will be able to afford the purchase of a second, leisure-time housing unit. The Asia/Pacific region will continue to account for slightly over half of the world’s housing stock during this time. The Africa/Mideast region, which had the second largest regional housing stock in 2014, is expected to register the fastest regional housing stock growth.
World Housing is available from The Freedonia Group Inc. For further details visit freedoniagroup.com.