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Worldwide construction of new housing units is expected to increase 3.3% per year to 60.9 million units in 2017, according to a new study from The Freedonia Group Inc. Even though expansion of the world population is projected to decelerate, a declining average household size will still allow the number of households in the world to grow 1.5% annually. That increase in households will add to demand for new housing units. In addition, increased rural-to-urban migration, especially in developing countries, will spur construction of new housing units in urban areas.
Such household formation and urbanization will create especially strong demand for new housing units in the Asia/Pacific and Africa/Mideast regions. Together, these two regions are expected to account for over 80% of the world’s new housing units constructed in 2017. North America is forecast to experience annual gains of 8.9%, while Western Europe can expect gains of 5.9% per year; several countries, including the U.S., Italy, and Spain, will experience double-digit annual increases in new housing construction.
On a global basis, multifamily units are forecast to experience faster gains in new construction than will single-family units through 2017. The increasing urbanization in many developing countries will drive this trend. In the Asia/Pacific region, construction of multifamily units is expected to grow 3.6% annually through 2017, more than one and one-half times the rate of increase in single-family home construction. Nevertheless, in both that region and the world, new single-family housing units will continue to outnumber new multifamily units.
In 2012, the world housing stock was nearly 2 billion units. The housing stock is expected to grow roughly in line with new household formations, causing the housing stock to increase 1.8% annually to close to 2.2 billion units in 2017. The Asia/Pacific region accounted for slightly over one-half of the world housing stock in 2012 and will maintain that share through 2017. China alone had 21% of the world housing stock, a slightly greater share than the housing stocks of North America and Western Europe combined. The Africa/Mideast region had the second largest regional share, at 16% in 2012, and through 2017 will experience the fastest regional expansion in the housing stock, fueled by above average population growth.
For more information, visit www.freedoniagroup.com.