Recovering housing markets in industrialized countries will help drive worldwide housing construction to 60.5 million new units by 2016, an overall increase of 3.5% per year, according to a new forecast.
Unfortunately for those industrialized countries, the growth rates will still leave the 2016 construction level well below that of a decade earlier, before the global financial crisis and resulting recession, according to World Housing, a report by The Freedonia Group Inc., a Cleveland-based industry market research firm.
Dwight Burdette / Wikimedia Commons
|New housing construction in the U.S. is projected to increase more than 18% per year, according to a new study.|
For example, new housing construction in the U.S. is forecast to increase more than 18% per year to 1.5 million units in 2016, but this figure represents only 70% of the construction activity in 2006, according to the study.
Similarly, Western Europe should see strong growth (6.3%, 1.8 million units) in new housing construction, but this will be roughly two-thirds of the level in 2006, the study said.
Urbanization in Developing Regions
Housing in developing regions generally was less affected by the global economic downturn, with a few exceptions. In those countries, ongoing rural-to-urban migration and increases in the number of households will drive construction of new housing units through 2016.
Such urbanization and household formation will generate a large slice of the world’s new housing pie for the Asia/Pacific and Africa/Mideast regions, accounting for 62% and 20%, according to the study.
Increasing urbanization in developing countries will also contribute to greater growth in multifamily housing, the study said. For example, in the Africa/Mideast region, multifamily housing unit construction will accelerate to 4.4% per year through 2016.
“Multifamily housing units will record faster gains in new construction through 2016 than will single-family units,” the study noted.
The Big Picture
The world housing stock was approaching 2 billion units in 2011, roughly 1% larger than the number of households, the report said. Asia/Pacific had the largest housing stock, with nearly 1 billion units accounting for 51% of the world total; China, alone, represented 21% of the world total.
The Africa/Mideast region had the second-largest housing stock in 2011, with 313 million units, or 16% of the world total. Western Europe and North America together accounted for just under one-fifth of the housing stock, according to the report.
Through 2016, the world stock of housing is expected to increase 1.8% per year, to 2.1 billion units, a deceleration from the 2001-2011 period as new household formation slows worldwide.
The most rapid increases in the housing stock will be in the Africa/Mideast region, fueled by above-average population growth.
Increases in the housing stock in Central and South America will also surpass the world average at 1.9% annually through 2016, to 155 million units.
“The Asia/Pacific region will retain its position as the leader in housing stock at 1.1 billion units, despite a deceleration in housing construction in China,” the study said.
About the Study
Freedonia Group’s study presents historical demand data (2001, 2006, and 2011) and forecasts for 2016 and 2021 by housing type, world region and for 22 countries. The study also takes into account market environment factors, evaluates company market share, and profiles industry competitors.