Global residential construction is expected to grow at an average of +3% a year between now and 2019, according to a new study by Freedonia Group. The market is expected to reach 62.6 million housing units per year by 2019, from 54.0 million in 2014.
The forecasting company said that 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 year, boosting demand for new housing. It added that increased rural-to-urban migration, particularly in developing countries, would spur construction of new housing in urban areas.
Freedonia Group expects the most robust growth to be in North America, where construction of new housing units is expected to rise an average of 7.2% per year between 2014 and 2017 to 2.86 million units annually by 2019. Good growth is also forecast for Western Europe, with a +4.8% annual average rise to 1.35 million units by 2019.
“In both cases, gains will be off a depressed 2014 base, with many countries recovering from the collapse of housing bubbles,” said Freedonia analyst Nick Cunningham.
On a global basis, multi-family units are expected to see faster gains in new construction than are single-family units, as a result of increasing urbanisation in developing countries. Freedonia said 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 multi-family units worldwide is forecast to advance 3.7% per year up to 2019.
Freedonia said another trend driving growth in residential construction was rising income levels. At lower income levels this allowed families to move out of shared accommodation into their own units, while at higher income levels it could drive the purchase of second homes.
This is expected to see the global stock of housing rise to 2.2 billion units in 2019.