(HOUSTON) – Hines, the global real estate investment manager, today released a new paper, “Global Living Reimagined.” The study reveals a global housing supply shortage and affordability crisis. According to Hines’ proprietary research, the global housing market would need a net 6.5 million housing units to meet current demand across a group of key developed economies[1].
“Several macro trends have converged to create a lack of supply that is driving a global affordability crisis, putting many major markets out of reach for potential homebuyers,” said Joshua Scoville, head of global research at Hines. “Over 80% of households in the developed economies we analyzed are in markets showing clear momentum for renting over buying. This signals that investors and owners need to stay keenly aware of the need for housing supply and where they may be able to add it."
The study explores major global trends, and investment opportunities, shaping the living sector, including:
- The Global Housing Shortage Fuels Shift Toward Renting: The traditional multifamily rental market continued to demonstrate strong performance globally, driven by a lack of affordable housing opportunities in major markets with job growth. Current conditions have fueled more recent momentum towards renting in many developed economies, even if the preference in some is still to own, and that trend may just accelerate. Unique demographic and market trends call for region-specific strategies.
- North American Living Sector Trends: U.S. home prices have reached unprecedented levels of unaffordability and the opportunity for traditional multifamily apartments remains compelling. Hines Research found that when compared to owning a home, renting is the most affordable it’s been since 1980. Additionally, as Millennials age into their prime child-rearing years, there has been increased demand in the single-family rental (SFR) market.
- European Living Sector Trends: In addition to traditional for-rent multifamily investment, there is a specific opportunity emerging in the student housing sector for European markets. An influx of international students has helped spur rent growth around certain European universities. Several major markets, including Paris and Milan, also face significant housing shortages.
- Asia Living Sector Trends: Investor demand for the overall living sector has begun to pick up, with a strong focus on Japan where the for-rent residential market is well-developed. If Japan's inflation and wage growth persist, Hines expects even more convincing rent growth and stronger values driven by a secular shift in rental growth. Investors have also been focused on the potential for Australian “Build to Rent” or BTR, and South Korea is a geography Hines believes is poised to evolve into an institutionally investible market.
“We’ve been closely watching demographics as one of our key macro trends for years, and the global living sector is a direct reflection of the impacts that changing demographics, combined with economic shifts, can have on the built environment,” said David Steinbach, global chief investment officer of Hines. “From an investor’s perspective, this current evolving landscape makes the living sector – whether traditional multifamily, single-family rental, or other variants like student accommodations – increasingly compelling. We expect to see significant investment activity in global living in the coming year.”
Hines’ “Global Living Reimagined” research paper is available for download on the Hines website.
About Hines
Hines is a leading global real estate investment manager. We own and operate $93.0 billion¹ of assets across property types and on behalf of a diverse group of institutional and private wealth clients. Every day, our 5,000 employees in 31 countries draw on our 67-year history to build the world forward by investing in, developing, and managing some of the world’s best real estate. To learn more, visit www.hines.com and follow @Hines on social media.
ÂąIncludes both the global Hines organization and RIA AUM as of June 30, 2024
[1] As of Q4 2024.
