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Construction of new housing units worldwide forecasted to
increase by three per cent annually

Global housing construction to reach 63m units by 2019

US, August 5, 2015

Worldwide construction of new housing units is forecasted to increase three per cent annually to 62.6 million units in 2019, according to a new study from The Freedonia Group, a Cleveland-based market research firm.

While global population growth is expected to decelerate, declines in average household size will still allow the number of households in the world to increase 1.6 per cent annually, boosting demand for new housing, said the ‘World Housing’ study.

The increased rural-to-urban migration, especially in developing countries, will spur construction of new housing units in urban areas, it added.

North America and Western Europe are expected to experience the most rapid growth in new housing units through 2019, it said.  

“In both cases, gains will be off a depressed 2014 base, with many countries recovering from the collapse of housing bubbles,” according to analyst Nick Cunningham.  

Several of the countries that experienced the most severe downturns, including the US, Ireland, Italy, Portugal, and Spain, will experience double-digit annual increases in new housing units, although in most cases 2019 levels will remain substantially below those in 2004, said the study.

On a global basis, multifamily units are forecast to experience faster gains in new construction than are single-family units, the result of increasing urbanisation in developing countries.  

Rural-to-urban migration will be particularly strong in the two most populous regions -- the Asia/Pacific and Africa/Middle East -- and those new urban residents will boost demand for multifamily housing.  

Construction of new multifamily units worldwide is forecast to advance 3.7 per cent per annum through 2019; in that year, more than 80 per cent of new housing units will be built in the Asia/Pacific and Africa/Middle East regions.  

Growth in the housing stock is expected to outpace household formation through the forecast period, reaching over 2.2 billion units in 2019.  

Rising income levels over the forecast period will support the increases in housing stock per household through two means.  

First, some lower-income households will be able to move out of shared living quarters into their own housing units.  Second, some affluent households will be able to afford the purchase of a second, leisure-time housing unit.

The Asia/Pacific region will continue to account for slightly over half of the world’s housing stock during this time.  The Africa/Middle East region, which had the second largest regional housing stock in 2014, is expected to register the fastest regional housing stock growth, it added. – TradeArabia News Service




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