Global fertility rates are plummeting. Countries like the U.S. (1.64), China, Japan, and Spain (all below 1.2) face drastic population reductions – up to 80% over three generations. South Korea’s rate of 0.7 could trigger a 96% decline. This is not only a demographic issue but also an economic time bomb.
For real estate, fewer people means fewer homes needed. An aging population will favor downsizing and specialized housing, while larger family homes sit vacant. Urban areas may initially absorb the shock, but even cities will face declining demand. Property values and rental incomes will inevitably fall, hurting investments and slowing construction. Immigrant-driven growth, which propped up Europe’s housing markets for decades, is no longer a reliable cushion as the fertility rate plunges across the globe and across ethnicities.
As demand shifts, so will the nature of housing. Assisted living, multi-generational homes, and adaptive reuse projects will dominate, while sprawling suburban developments could become ghost towns. Governments may attempt to incentivize higher birth rates or attract foreign buyers, but the long-term trajectory points toward overcapacity and falling values.