Arguably, no set of long-term drivers affects real estate demand like demographics. Amidst the recent financial market volatility from the pandemic, inflation, and conflicts in Ukraine and the Middle East, it is easy for investors to take an eye off longer-term secular trends that shape the futures of their markets. This article highlights how demographic trends are expected to affect real estate demand and influence asset prices and investment strategy.
While we often refer to “the real estate market” as though it is one entity, it is always important to be mindful that there are two distinct and interrelated markets. The first is the market to occupy space, and this drives the rental income that buildings generate. The second is the capital markets, which determine how this income stream is priced. Demographic changes have significant effects on both.
Real estate as a basic human need
Real estate’s connection to demographics is well esta
