Global Housing: Demand to Be Strongest in North America Through 2021 While Potential Crisis Looms in Western Europe
North America will post the fastest gains in new housing construction of any global region. The 4 percent annual growth projected for new housing units in North America through 2021 will be driven by above average household formation in Mexico as well as strong construction activity in the US. The size of an average North American housing unit is forecast to grow to 145 square meters in 2021, making North America’s existing floor space the second largest, behind only the Asia/Pacific region, which had nearly six times as many housing units as North America in 2016. For in-depth analysis of these and other trends, see “Global Housing Outlook, 7th Edition,” a new study from The Freedonia Group, a Cleveland-based industry research firm.
Surging housing prices and household debt throughout Western Europe may indicate new housing bubble. Fueling worries, Germany’s central bank estimated in early 2017 that the housing market is overvalued by as much as 30 percent; in 2016, the nation accounted for 19 percent of the EU’s outstanding mortgage value. In Sweden, average housing prices grew 15 percent between 2015 and 2016, faster than any other EU country, and household debt as a percentage of income reached 350 percent. To mitigate fears, Denmark and Norway enacted policies to restrict mortgage lending. In Spain, the economic recovery inches forward after years of downturn, as average housing prices increased for the first time in eight years in 2015 and foreclosures fell by over 30 percent in 2016.
China and India will continue to dominate the global housing market through 2021, representing a combined share of 43 percent of all new housing units. Growth will be supported by above average gains in residential building construction, particularly in India, where growth is projected to be more than double the global average. Following declines during the 2011–2016 period in China large-scale urbanization projects will promote the rebound of new multifamily housing units.
“Global Housing Outlook, 7th Edition” (published 10/2017, 420 pages) is available for $4,500 from The Freedonia Group. For further details contact Corinne Gangloff by phone (440) 684.9600 or email email@example.com.