With the exception of Nigeria, the global population is decreasing as more parents are delaying having children and fewer babies are being born. Reasons for this population shift include the worldwide changes in cultural and social mores as more women have gained access to education and contraception, as well as more people marrying later in life and the substantive cost involved with having children. Although some countries such as South Korea are trying to entice their population to have children by providing increased child allowances and incentives for fertility treatments. Yet, demographers predict that by the latter half of this century or earlier, the global population will enter into a sustained decline.
How does this translate into real estate?
Although it may take decades before we actually experience this global population shift, its results will inevitably change the way we live. As more and more people age at the same time as fewer births, society will transform. Many universities will need to merge, nurseries are currently being replaced by adult centers, and city centers are contracting. In Germany, for example, demolitions have removed approximately 330,000 units from housing stock since 2002.
Housing, in general, will be affected not only in terms of supply but also the stores, parks, and town or city centers will evolve for different uses. In China, the province of Hegang is called a “ghost city” since almost 10 percent of its population since 2010 was lost due to population decline that the homes cost so little that people compare them to cabbage. In Japan, adult diapers outsell baby diapers and municipalities have consolidated as towns age and shrink. In Sweden, cities have shifted resources from schools to elder care. More countries are raising their retirement age so that people will continue working, as the population dwindles.
Due to the result of such a significant population shift, the way city centers are constructed will change. There may be less of a need for recreational sport parks, for instance, and more of a need for communal housing as our older population may find it easier to divvy up chores and living responsibilities. There may be more nursing homes and fewer daycares for children. Even in Weston we are seeing regional parks’ roller rinks being converted to pickleball courts.
There is also a question as to where the aging population will live. Both the declining birthrate and rapid industrialization has created more density in cities, in the outlying towns schools have closed and parks overgrown because there are not enough children. This has created pressure on the infrastructure and housing in metropolitan areas while, at the same time, has left towns abandoned.
What does this all mean?
Simply put, society will evolve as our global population declines. The need for certain housing services, such as nurseries and schools, may be eclipsed by senior wellness facilities. Additionally, the type of housing will change to accommodate the populations needs.
While these changes may take years to fully develop, the fact is that the change is already starting. We already know how resilient we are, especially this past year with the challenges that COVID-19 presented. We will continue to be resilient, prepare and respond to such population changes. With population change, the real estate market will also transform.
Should you need assistance with any escrow services or questions, our title company, Weston Title & Escrow, Inc. is able to help you. Feel free to contact our Weston Title team at 954-384-6168. For over 30+ years, we are here for you. Should you need assistance in purchasing, or have a legal question about a potential purchase, our team at Oppenheim Law is here for you, too, and we can be reached at 954-384-6114.
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