A massive real estate boom is on the way, according to Byron Carlock, US real estate practice leader for consultancy PricewaterhouseCoopers (PwC) and author of PwC’s report 'Real estate 2020: building the future'. According to the report, this boom will be most evident in emerging economies, where rapid urbanisation and demographic changes are set to transform the real estate landscape. 

“The real estate industry is currently undergoing fundamental changes that we expect will significantly reshape the landscape in 2020,” Mr Carlock said.

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The report found that, by 2025, there will be 37 'megacities', up from 23 today, and 12 of these will be in emerging markets. Further, by 2025, emerging markets will host 60% of global construction activity.

The report forecasts that the global stock of investable real estate will rise by more than 55% to about $45,300bn by 2020. (It totaled $29,000bn in 2012.) During that time, total investable real estate in the US and Canada will rise by 38% to $11,000bn. By 2030, the global stock of investable real estate will expand again by possibly another 55% or more; and by 2050, the number of people over 60 years old will exceed the number under 15 for the first time in record.

“Demographic shifts will affect demand for real estate fundamentally in 2020, with the ageing 'baby boomer' [generation] creating an increase in demand for specialist types of real estate, such as senior and intergenerational housing, while there will be a rise in micro-units for the younger population,” said Mitch Roschelle, partner, US real estate advisory practice leader, PwC.

The study maintained that by 2020, the 21st century’s great migration to cities will be well underway. Cities in Asia, Africa, the Middle East and Latin America are particularly expected to swell. Western countries will see increased urbanisation, albeit at a slower pace. But by 2020, they will compete fiercely with each other.

The report maintained that expansion will be the greatest in emerging economies where economic development should lead to better tenant quality. Some countries will even benefit from clearer property rights. Private capital is expected to play a critical role. Competition for prime assets should also intensify. Key drivers for value will be technology innovation and sustainability. The report also maintained that collaborating with governments will become more important.