Housing is ultimately an essential social infrastructure and demand often more robust than may be recognised. As the economic cycle has moved over the last year we ask: Why Living now?
- The living sector has historically produced high risk-adjusted returns over the long term. This outperformance has been lowly correlated with commercial real estate, and therefore provides attractive diversification benefits.
- A number of trends are playing out across Europe’s living market including persistent demand-supply imbalances that have supported rental and capital value, outdated stock that does not meet modern energy regulations, and shifting demographics creating demand for smaller units.
- We argue that supportive structural fundamentals – which lie in contrast to those for offices and retail – provide reason to suggest that living will be Europe’s largest real estate sector within five years.