Worldwide construction of new housing units is projected to reach 61.3 million in 2018 on 2.9% yearly advances. Although global population growth is expected to decelerate slightly over the forecast period, declines in average household size will support 1.6% annual growth in the number of households, which will in turn boost demand for new housing. Changes in population distribution, mainly due to rural-to-urban migration, will also bolster demand for new housing units, particularly in urban areas. These and other trends are presented in “World Housing,” a recent study from The Freedonia Group, Inc.
Through 2018, the growth in construction of multifamily housing units is projected to outpace that of single-family housing units. According to analyst Mariel Behnke, “Rural-to-urban migration will be particularly strong in the two most populous regions—the Asia-Pacific and Africa/Mideast—and those new urban residents will boost demand for multifamily housing in urban areas.”
Worldwide, construction of new multifamily units will increase 3.2% annually through 2018, with nearly 90% of growth taking place in the Asia-Pacific and Africa/Mideast regions. Nevertheless, in those regions, and worldwide, single-family dwellings will continue to make up the majority of new housing units.
Higher-income countries that suffered dramatic declines in residential construction from 2008-2013 are forecast to see some of the fastest gains in construction of new housing units through 2018, with advances typically coming from a depressed 2013 base. Spurred by a partial rebound in U.S. housing construction, North America is forecast to post nearly 8% annual growth in new housing units.
Nevertheless, the largest absolute gains in construction of new housing units are expected in the Asia-Pacific and Africa/Mideast regions. Nearly 38 million new housing units will be constructed in the Asia-Pacific region in 2018, accounting for over three-fifths of the world total, even though the rate of growth in the region will be below the global average. A declining average household size, as well as rising demand for housing in urban areas, will support the continued high level of construction, particularly in developing countries in the region.
New dwelling construction in the Africa/Mideast region is expected to reach 13.0 million in 2018 on 3.7% annual growth. Above-average population growth and household formation will support rapid advances.