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Alice Breheny

Long term trends: Demographic

The coming decades will see major demographic changes ranging from explosive population growth in some countries and declines in others.

The coming decades will see major demographic changes ranging from explosive population growth in some countries and declines in others. In some markets it is the rearrangement of population either geographically or by age structure that will have the biggest implications.

These trends at present are unprecedented in terms of pace, and in most cases gaining momentum. They will, without doubt, have a far reaching impact, ranging from pressure on resources and infrastructure to changes in social behaviour. Not least are the significant implications for demand for real estate - intensifying in some regions and sectors and easing in others.

One of the most influential trends under the banner of demographic change is likely to be the ageing of the global population. Across the world, improving education and health means the associated rising life expectancy is set to drive an ongoing increase in the number of over-60s. Some societies are ageing more rapidly than others - mainly in developed economies where the birth rate is slowing. This means their supply of working-age people will decline as a proportion of the total population. In contrast, other countries - usually developing markets - have populations that are young and growing, promising ever-larger labour forces and consumer markets, potentially becoming more competitive.

The social and economic implications of such differences should not be underestimated. With 360 million older workers set to leave the global workforce by 2050, the burden of supporting the ever-expanding retired group will put the working population under increasing strain in many countries. In others, growing populations will need to be fed, housed, educated and employed to sustain growth - an altogether different challenge. In either case, demographic shifts will likely be the strongest force behind social and economic change. As such these trends need to be central to long term global real estate investment strategy.

Alice Breheny

Alice Breheny

Global Head of Research

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