Affluent Popoulation 50+ Set To Drive Global City Residential Markets Over Next Decade
For Immediate Release – According to the Savills Prime of Life Residential Index* Singapore is projected to have 48% of affluent population aged 50 and above by 2033, ranking third on the index. The top spot on the Savills index is North Port in Florida (57%), closely followed by Shanghai in China (53%).
The Savills index identifies those locations that are poised to benefit the most from this growing demographic of people aged 50 and above and the emergence of new prime residential hotspots in the next decade in 165 countries worldwide. (Please see Table 1)
In Singapore, nearly half of the affluent population will be over 50 by 2033, and an increasing number of fifty-somethings in the city are single. To meet their needs, developers will need to consider smaller homes and apartments.
Alan Cheong, Executive Director of Research & Consultancy, Savills Singapore says: “With an aging population, Singapore residents are likely to downsize from more expensive or larger homes. They are looking to reduce their effort expanded to maintain the homes as well. A larger home requires not only much greater individual effort by the elderly, it also increases the risks of accidents as their ambulatory coordination skills weaken over time.”
Some developers are already taking note of this, and more are expected over time. This, however, doesn’t mean that the younger buyers will be crowded out by the smaller units as the unit mix in a medium to large sized non-landed development has a varied choice of apartment types and sizes to cater to various age groups and family sizes.
Marcus Loo, Chief Executive Officer of Savills Singapore adds, “As the population in Singapore matures, the demand for smaller homes is expected to increase. More are expected to downgrade to unlock capital for old age consumption and medical expenses. Besides, the ability to maintain a larger home for an elderly becomes challenging.”
According to the index, the global percentage of people aged 50 and above is expected to reach 28.4% by 2033, driven by decreasing birth rates and increasing life expectancy. This trend, combined with factors like improved health, smaller families, and rising incomes, will propel prime residential markets around the world by 2033, with older populations wielding accumulated wealth.
Lucy Palk, Analyst, Savills World Research comments, “The 50-plus category includes everyone from busy working parents to carefree retirees. When it comes to property, their top priorities are quality and space – for example enough space to comfortably work, and entertain, from home.”
“Those seeking the city lifestyle, but larger living spaces increasingly opt for smaller cities, which offer the advantages of urban centres but often at lower costs.”
GLOBAL OUTLOOK
A maturing, affluent population presents a unique set of challenges for the prime residential market. European nations already have high proportions of affluent people over 50, but a large number of Asian and Middle Eastern countries will see their mature populations explode, as more people become wealthier. The fastest growth in this age group over the next decade will be in Saudi Arabia and Kuwait.
In Kuwait City, a rapidly expanding middle class is driving a dramatic rise in the population aged 50 and above, alongside a 39% growth in households with an annual income of $250,000 or more. The demands for space, entertainment, and lifestyle from this demographic will significantly shape the demand and price growth in the prime residential market over the next decade.
Lucy Palk, concludes, “While some cities will attract more newcomers, many will rely on domestic trends to drive growth. The result for real estate is the same. Prime residential hotspots around the world should prepare for influxes of affluent over-50s, with different sets of expectations around what a home should be.”
*Analysis focuses on cities with a population greater than half a million people, more than 10,000 households with an income of $250,000 per annum. City with the highest share of those aged 50+ per country.