Global New Housing Demand to Remain Low
October 1, 2010
The 2009 global recession dealt a severe blow to housing markets in much of the world, most noticeably in the industrialized countries. New housing construction dropped so sharply in North America, Western Europe and Japan that those countries are expected to enjoy the fastest growth in housing construction through 2014. Despite some impressive recoveries-new housing activity in the U.S. is forecast to increase 24% annually, for example-the level of activity in 2014 will generally remain below that achieved a decade earlier. These and other trends are presented in “World Housing,” a new study from The Freedonia Group Inc.
Demand for new housing through 2014 is projected to advance worldwide by 3% per year, generating the construction of 53 million new housing units. Among developing regions, the most rapid growth in new housing units will be in the Africa/Mideast region, where growth in population and household formation will support 3.9% annual advances in new housing construction through 2014 to 11 million units. However, a significant share of the new housing constructed in sub-Saharan Africa will merely satisfy basic needs for shelter.
The largest number of new housing units will be generated in the Asia/Pacific region, where an expected rise in new housing construction of 2% per year will result in 31.7 million new units. That pace will represent a deceleration from the 2004-2009 experience, primarily because of tepid growth of just 0.05% annually in the large Chinese market.
The world housing stock was 1.9 billion units in 2009, roughly 2% larger than the number of households. The Asia/Pacific region had the largest housing stock, with its nearly one billion units accounting for 52% of the world total; China alone represented 23% of the world total. The Africa/Mideast region had the second largest housing stock in 2009, with 292 million units, or 15% of the world total. In the aggregate, Western Europe and North America together accounted for just under one-fifth of the housing stock.
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